SARB cuts interest rates by 25 basis points
South African Reserve Bank (SARB) governor, Lesetja Kganyago, announced another 25-basis points repo rate cut on 23 July, taking the rate to a four-decade record low of 3.5% from the previous 3.75%.
Currently, Namibia’s repo rate stands at 4%, higher than the 3.5% of the South African Reserve Bank rate.
Market-wide expectation is that the Bank of Namibia will follow SARB and cut its repo rate further by 25 to 50 basis points during its August monetary policy committee meeting as the banks take unprecedented monetary policy steps to help mitigate the economic fallout of the COVID-19 pandemic.
Following the latest the repo rate cut, it means that the SARB has slashed its rates by 300 basis points (3%) this year, while the Bank of Namibia’s July rate cut brings the total reduction in the repo rate for this year to an unprecedented 250 basis points.