South Africa cuts interest rate

South Africa cuts interest rate

The South African Reserve Bank cut its benchmark interest rate by the biggest margin in more than a decade. This measure has been taken in order to support a fragile economy, that’s expected to be hit hard by the Coronavirus.

The decision was unanimous to lower the interest rate from 6.25% to 5.25%.

The Reserve Bank was also helped in its decision by a collapse in Oil prices. While consumer inflation reached the highest level in 15 months (4.6%) in February, Brent Oil is now trading around $27 a barrel, from about $56 in February.

South Africa is already in recession, and the fall-out from business disruption due to the Coronavirus crisis might be significant, analysts say.


Sources: bloomberg.com, fin24.com

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