South Africa’s central bank has reduced its benchmark interest rate by 25 basis points to 7.5%, marking the third consecutive cut in borrowing costs. The decision, announced by Governor Lesetja Kganyago, aligns with the median estimate of economists surveyed by Bloomberg. The move aims to support the economy amid contained near-term inflation, though the medium-term outlook remains uncertain due to risks from the global environment.
The Monetary Policy Committee (MPC) was divided in its decision, with four members voting for the cut and two favoring no change. Kganyago emphasized that future rate decisions will be made on a meeting-by-meeting basis, with no pre-commitment to a specific path. This cautious approach reflects the central bank’s efforts to balance economic growth with inflation risks in a volatile global landscape.
