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It was the 2nd straight rate cut so far this year, bringing borrowing costs to the lowest since December of 2013. The South Africa Reserve Bank slashed its key repo rate by 25bps to a new all-time low of 3.50% on July 23rd 2020, as widely expected. Current prediction also point to 3.6% inflation in 2020 (vs prior 3.8%), 4.5% in 2021 (vs prior 4.6%) and 4.4% in 2022 (unrevised).
According to the Prescribed Rate of Interest Act, interest on debts where no rate is prescribed is calculated at the repo rate plus 3.5%. Interest Rate Decision TEForecast The CPI inflation rates in the table are presented both on a monthly basis (compared to the month before) as well as on a yearly basis (compared to the same month the year before). Since the beginning of 2020, the central bank has cut its key repo rate by a total of 300 bps.The South Africa Reserve Bank slashed its key repo rate by 50bps to 3.75% during its May meeting. In South Africa, the interest rates decisions are taken by the South African Reserve Bank’s Monetary Policy Committee (MPC). Policymakers said that monetary policy can ease financial conditions and improve the resilience of households and firms to the economic implications of the coronavirus outbreak. It allows API clients to download millions of rows of historical data, to query our real-time economic calendar, subscribe to updates and receive quotes for currencies, commodities, stocks and bonds. Blog posts are not legal advice. Rationale for a financial stability focus; Domestic Responsibilities. Policymakers said that low inflation has created space for monetary policy to respond to deteriorating economic conditions. The inflation rate is based upon the consumer price index (CPI). Interest Rate Decision Policymakers said that recovery after the coronavirus peaks is uncertain and forecast a 6.1% contraction in 2020 (previously -0.2%), 2.2% growth in 2021 (previously 1%) and 2.7% expansion in 2022 (previously 1.6%). The move follows a 50bps rate on May 21st, amid the coronavirus crisis. South Africa: SARB cuts repo rate again in July to new all-time low July 23, 2020 On 23 July, the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) lowered the repurchase rate by 25 basis points to 3.50%, coming in line with market expectations and marking a new record low. Interest rate by loan term. Inflation South Africa 2020 (CPI) - The inflation chart and table below feature an overview of the South African inflation in 2020: CPI South Africa 2020. Current Account Release; Current Account Release; Biennial Conference 2019; Occasional Bulletin of Economic Notes; Financial Stability. IMF Compilation Exercise; Financial Stability Research Conference. All Rights Reserved.Prescribed rate of interest is 8.75% from 1 May 2020 20 Corporate Park 11 Sinembe Crescent Sinembe Office Park La Lucia Ridge … Interest Rate Decision Policymakers noted that the economic contraction and slow recovery will keep inflation well below the midpoint of the target range this year. Current forecasts point to inflation at 3.8% in 2020 (vs prior 4.7%), 4.6% in 2021 (unrevised) and 4.4% in 2022 (vs prior 4.5%). This blog focuses on the South African market and is about sharing knowledge with you. South Africa’s Prime Lending Rate data was reported at 7.250 % pa in Jul 2020. Policymakers expect a 7% GDP contraction in 2020, even if lockdown restrictions ease in the next months. Interest Rate in South Africa averaged 12.35 percent from 1998 until 2020, reaching an all time high of 23.99 percent in June of 1998 and a record low of 3.75 percent in May of 2020. The parties can therefore avoid the application of the prescribed rate by agreeing to a different interest rate, subject to other applicable laws such as the National Credit Act which may limit the amount of interest that can be charged.When the Reserve Bank changes the repo rate a new prescribed rate of interest becomes effective from the first day of the second month following the month of the new repo rate announcement.