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Reserve Bank Repo Rate to 6.75% | Prime at 10.25%

The South African Reserve Bank surprised markets with an interest rate cut. While most economists have been expecting the bank to move towards a cut‚ it was not expected to come quite so soon.

The Bank cut the repo rate to 6.75% from 7%.

Bank governor Lesetja Kganyago highlighted an improving inflation outlook and deteriorating growth — though there were risks to the inflation outlook‚ he said.

“Despite a degree of volatility‚ the rand exchange rate has been relatively resilient in the face of expected monetary policy tightening in some advanced economies‚ as well as domestic political risks and uncertainties. Risks to the inflation outlook still remain.

“The rand remains vulnerable to increased global risk aversion‚ domestic political shocks‚ and to the possibility of further ratings downgrades‚” he said.

Kganyago outlined the following inflation forecasts:

- 2017: consumer inflation will average 5.3% (from the May forecast of 5.7%);

- 2018: 4.9% (from 5.1% forecast in May); and

- 2019: 5.2% (from 5.3% forecast in May).

For more information on purchasing, renting or investing in commercial and industrial property in Cape Town, please contact Robert Ryll | Cell Number: 082 374 2662 | Landline: 021 552 4100 or Email: rob@primeindustrial.co.za


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