South Africa’s central bank lowered its benchmark interest rate by 25 basis points to 7.75 percent on Thursday, citing mixed economic data and global uncertainty.
This move follows a drop in inflation to 2.8 percent in October, its lowest since June 2020.
Governor Lesetja Kganyago stated that inflation is stable in the short term but uncertain in the medium term due to potential increases in food, electricity, and water costs.
While manufacturing data remains weak, the mining sector is strong, and unemployment has decreased to 32.1 percent from 33.5 percent in the previous quarter.
Kganyago believes that economic growth could improve next year, fueled by structural reforms in the energy and transport sectors.
Kganyago emphasized caution due to global factors, such as potential interest rate hikes and the recent depreciation of the rand.
He also pointed to rising inflation in the U.S. and U.K., as well as global protectionism, as risks to global trade and economic stability.
