Repo rate cut welcomed by businesses

Mluleki Mrwebi

20 July 2012

The Reserve Bank’s unexpected decision to cut the repo rate to five-percent has been welcomed by unions and business organisations.

Reserve Bank Governor Gill Marcus made the announement on Thursday.

The repo rate cut will impact consumers due to the prime rate being brought down to 8.5-percent.

The rate had remained at five-and-a-half-percent since November 2010.

Economist Merina Willemse said that she is surprised as only one out of eleven Economists in the latest I-Net Bridge survey expected the cut.

Willemse added that the move shows that the Reserve Bank has a lack of confidence in the growth of the economy in the near future.

Reserve Bank Governor Gill Marcus says the global economy has worsened since the last meeting of the Monetary Policy Committee.