• 10 tips to find bargains

    Susan Erasmus gives advice on how bargain hunters can get the most bang for their buck.

  • Inside Labour

    Labour's bitter breaches need to be seen in historical context, says Terry Bell.

  • Rich getting richer

    Economists differ on how to tackle the chasm between rich and poor, says Leopold Scholtz.

See More

Reserve Bank cuts interest rates

Jul 19 2012 16:01 Sapa

Related Articles

Retail sales dim rate cut hopes

Barclays former exec testifies

Libor scandal undermines market confidence

Repo rate seen steady at 5.5%

Factory output blows past forecasts

Interest rate cut to stimulate EU economies

Johannesburg - The SA Reserve Bank (Sarb) has cut the repo rate by 50 basis points to five percent, governor Gill Marcus said on Thursday.

The prime rate would decline to 8.5%.

This follows nine consecutive Monetary Policy Committee (MPC) meetings where the repo rate remained unchanged at 5.5 percent, after it was reduced by 650 basis points between mid-2008 and November 2010.

The Sarb determines the interest rate based on its mandate to keep inflation within a target of between three and six percent.

Consumer price inflation was 5.5% for June while producer price inflation was 6.6% in May.

"The MPC views the prevailing conditions to be appropriate for further monetary accommodation to the economy that will not undermine the inflation outlook and has therefore decided to reduce the repurchase rate by 50 basis points to 5.0% from Friday 20 July 2012," Marcus said.

"While it is recognised that such a move on its own will not overcome the challenges facing the economy, it is felt that it can help alleviate some of the pressures faced by some sectors, and will act appropriately in line with its mandate."

"There is no easy decision in the MPC and this one was a particularly robust discussion. In the end it was a unanimous decision that this was the right thing to do. Given the conditions that are prevailing and our concerns going forward we thought it important to be proactive," she said.

sarb  |  gill marcus  |  interest rates  |  sa economy


Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

Brought to you by BizNews

More from BizNews

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

10 most expensive cars In the world

This is car porn at its best!


Luxury living

Seven of the most expensive children's toys ever made
5 millionaires turned murderers
The youngest billionaires in the world and how they made it
Watch: Flying first class has never been this luxurious!

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

How do you see your boss? He/sheis:

Previous results · Suggest a vote