South Africa’s Central Bank Cuts Interest Rates as Inflation Reduces Beyond Expectations

South Africa’s central bank has reduced its benchmark interest rate by 25 basis points to 8 per cent, marking the first rate cut since 2020. The central bank Governor, Lesetja Kganyago announced the decision during a press briefing on Thursday.

This move comes as inflation in the country has fallen below the central bank’s target range of 4.5 per cent, giving policymakers room to lower rates after maintaining high levels for 15 years. The cut follows a growing trend toward global financial easing, which was sparked by the United States Federal Reserve’s recent rate reduction. Kganyago noted that  South Africa’s recent rate cut aligns with predictions by most economists.

With inflation stabilising and the rand holding firm, South Africa may see more favourable financial conditions, according to analysts.

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