Repo Rate To Be Cut Again?

Reading Time: < 1 minute

July 2020 Repo Rate Cut Coming?

Experts speculate that the SA Repo Rate will once again be cut this month to another record low due to the Covid-19 pandemic.

The Repo Rate (which banks borrow money at and then fix their lending rates to) has already been cut 4 times during 2020. This is primarily due to the Covid-19 pandemic and national lockdown which is in place to try to regulate the spread of the virus and demand for hospital treatment.

‘At present, the rate sits at 3.75%’

In March and April, there were 2 100 basis point cuts and a 50 point cut in May. At present, the rate sits at 3.75% and many experts are predicting that there will at least be a 25 basis point cut again – bringing the rate to a new all-time low of 3.5%.

Not all experts agree (do they ever?) and some feel it is more likely that the SA Reserve Bank will adopt a wait and see attitude leaving the rate at the low it has already reached. This is because they feel that inflation has stalled at around 2.1% for now which is well within the SARB’s expected range.

‘The announcement will be made within a few days’

The announcement will be made within a few days and consumers who are having a hard time repaying all their credit agreements (basically everyone) are holding on to see if there will be some additional relief in store during what has been a disastrous financial year.