SA Reserve Bank reduces repo rate
The repo rate will decrease by 25 basis point to 6.5% in April, the Reserve Bank announced on Wednesday.
This means the prime lending rate now stands at 10%.
Following a meeting of the Monetary Policy Committee, the bank's governor Lesetja Kganyago said four members were in favour of a decrease, while three wanted the repurchase rate to remain unchanged.
Kganyago says the drop in inflation to 4.0% in February left "some room to provide further accomodation without undermining the inflation trajectory".
However the bank says it would like to see inflation closer to the centre of the target band of between 3-and 6%.
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Chief Economist at FNB, Mamello Matikinca says this will make a huge difference to consumers.
"I think it does provide some level of relief," explains Matikinca, saying especially in an environment in which taxes are increasing.
Value added tax (VAT) will increase from 14-to 15% on April 1.
Kganyago said while February's budget was well received, there are still risks when it comes to implementation.
Listen below to the announcement being made by Reserve Bank Governor , Lesetja Kganyago, courtesy of Jacaranda FM News.