SARB MPC urged to make bold cut in policy rates

JOHANNESBURG - Some economists and industry leaders have called on the South African Reserve Bank’s monetary policy committee (MPC) to make a bold cut in policy rates.

Governor Lesetja Kganyago is set to announce the latest decision on the repo rate on Thursday.

The MPC deliberated on rates during its bi-monthly meeting this week, with the announcement set for 3 pm.

In its previous meeting in May, the committee cut the repo rate down to the current rate of 7.25% bringing the prime lending rate to 10.75%.

Industry leaders in the property sector say the central bank's "overly cautious" stance has meant that it missed at least two prior opportunities to cut the rate earlier and provide a more meaningful economic boost.

Chairman of the Seeff Property Group, Samuel Seef, said while the four rate cuts since mid-2024 had provided welcome relief to consumers, homeowners and property buyers, it has had little overall impact on the economy and property market.

The property transaction volumes for the first half of this year, compared to last year, are down by about 16% despite the rate cuts.

Seef said the slow rate-cutting cycle was particularly glaring given the robust economic fundamentals over recent months, with tamer inflation and a stable rand against the dollar.

"There is simply no longer any time for a 'wait and see' approach. The economy and the property market need an injection of energy, and we urge the bank to focus on what the SA economy needs, a bold rate cut which can serve as a rocket to push the economy and try and grow the GDP, a critical necessity given the unemployment rate and what is best for everyone in South Africa," said Seeff

Seeff said the delays in cutting the rate, despite the favourable conditions, have been detrimental to economic growth and job creation, calling for at least another 25 basis point cut on Thursday.