Repo rate cut to benefit retailers, consumers
Economist, Graeme Kerner says the Reserve Bank's decision to reduce the repo rate by 25 basis points will bring some much-needed relief for cash-strapped consumers, homeowners and businesses.
Reserve Bank Governor, Lesetja Kganyago said yesterday that the Monetary Policy Committee decided to bring down the rate at which the central bank lends money to commercial banks to 6.75%, bringing the interest rate to 10.25%.
"Retailers in our market today are playing with both hands and running hard. Truworths is up over 5%, Mr Price is up almost 5%, Mass is up 4.75%, Foschini Group is up well over 3%," Kerner says.
Kganyago said while the inflation outlook's improved - there're still risks. Kerner says cuts to the prime lending rate is a good move.
"The view that they've taken is the inflation rate came in just over 5%. This was better than expected. The inflation that we've had in the system is not demand-pull inflation, it's cost-push," he says.