(Bloomberg) — South Africa’s central bank cut interest rates by 25 basis points, lowering them from a 15-year high and marking the first easing in more than four years.
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The monetary policy committee reduced its benchmark rate to 8%, Governor Lesetja Kganyago told reporters at a briefing north of Johannesburg on Thursday. That matched the median estimate of 24 economists polled in a Bloomberg survey. Only one analyst had penciled in a 50 basis-point cut.
The move follows a 50 basis-point rate reduction by the Federal Reserve on Wednesday and a forecast for further cuts that’s seen leading an easing in global financial conditions. In addition to the 25 basis-point cut, the MPC also considered cutting by 50 basis points and a hold, Kganyago said.
“The MPC ultimately reached consensus on 25 basis points, agreeing that a less restrictive stance was consistent with sustainably lower inflation over the medium term,” he said. “We assess the 25 basis-point cut to be a prudent stance to take.”
South Africa’s rand held gains after the announcement. The currency traded 0.5% firmer at 17.4604 per dollar as of 3:08 p.m. in Johannesburg. The yield on local-currency government bonds due Feb. 2035 was down five basis points from closing levels to 10.1%.
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–With assistance from Monique Vanek, Mike Cohen and Colleen Goko.
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