South Africa’s repo rate has been slashed by 100 basis points or 1% to 5.25%.
This was announced by Reserve Bank Governor Lesetja Kganyago on Thursday afternoon, in a similar move to other central banks around the world.
The cut will take the repo rate to its lowest level since late 2013.
Kganyago says it will see South Africa's current prime commercial lending rate drop from 9.75% to 8.75%.
In announcing the decision, Kganyago said low inflation had created space for monetary policy to respond to deteriorating economic conditions.
The bank sees consumer inflation averaging 3.8% for 2020, 4.6% for 2021, and 4.4% in 2022.
It also expects the economy to contract by 0.2% in 2020. GDP growth is expected to rise to 1.0% in 2021 and to 1.6% in 2022.
Dr Andrew Golding, chief executive of the Pam Golding Property group, said in his reaction that the decision by the Monetary Policy Committee to reduce the repo rate by 100bps is a critical step towards financial survival.
This, as consumers and the economy navigate unchartered territory and unexpected new challenges as a result of the onset of the Coronavirus.
"The ensuing reduction in the interest rate, coupled with next month's (April) likely substantial drop in the fuel price as a result of the dramatic reduction in global oil prices - despite the additional 25c a litre tariff increase as announced in the recent National Budget, affords some relief to South African consumers," said Golding.
"Hopefully it will help give the economy the boost that it so desperately needs right now."
