JOHANNESBURG – The decision by the Reserve Bank to cut the repo rate by 25 basis points has been broadly welcomed but some said that the Monetary Policy Committee could have been more aggressive in decreasing the rate.Kganyago has predicted growth to be 0.6% this year, a far cry from the predicted 1.8% in January.
However, the Black Business Council said that the scope existed for a more ambitious 50 basis points reduction, which would give the economy a proper push. At 1600 GMT, the rand was 0.93% higher at R13.8825 per dollar after closing at R14.0125 in a previous session. The US Federal Reserve is set to lower rates at its own policy meeting next week, a move likely to spur demand for higher-yielding emerging-market assets, although South Africa’s now lower lending rate may limit interest.
Stocks closed higher, with miners, retailers and financial firms, all of which benefit from the interest rate decision or its effect on the rand, topping the Johannesburg Stock Exchange’s blue-chip index.
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