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SA cuts rates in weak economy

PRETORIA — The South African central bank cut its main lending rate by 25 basis points to 6,5%, as expected, citing weak economic growth and inflation which has stayed around the midpoint of its target range.

The last time the South African Reserve Bank (SARB) cut its repo rate was in March 2018.

The SARB is one of many central banks under pressure to ease monetary policy as fears over domestic and global growth have intensified.

“The MPC welcomes the continued downward trend in recent inflation outcomes and the moderation in inflation expectations of about one percentage point since
2016,” SARB governor Lesetja Kganyago told a news conference.

Kganyago said the overall risks to the inflation outlook were assessed to be largely balanced and that economic growth was expected to rebound in the second quarter after a sharp 3,2% contraction in the first quarter.

Thursday’s rate decision was unanimous.

Reuters

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