The Fourth Repo Rate Cut of 2020
The recent repo rate cut of 50 basis points brings it to the lowest it has been in nearly 50 years. This is the fourth cut to happen this year and although it is surprising, it is hardly shocking given the mounting toll COVID-19 is having on South Africa's economy. The economy has all but shut down due to the nationwide lockdown. The decision to cut the repo rate to 3.75% is a clear indication of the seriousness of the virus and its effects on the economy.
A large part of the country is expected to move from level 4 to level 3 on the 1st of June, which means that the economy will open up a bit more. However, depending on the government's decisions regarding the easing of the lockdown in certain epicentres, like Cape Town for example, means that the economic recovery of the city and other metropoles could be impacted.
Industries and consumers are under a great deal of financial pressure - especially those who have had to take salary cuts or who were retrenched. This repo rate cut will be a welcomed relief for all - especially those looking to buy property for the first time.
COVID-19 has affected us all in various ways, but one thing remains the same - South Africans have unmatched resilience and it might be a while until things begin to recover but we will come out stronger than before.
25 May 2020
Author Greeff
