Effective 22 May 2020, the repo rate will be 3.75% per annum and the prime rate 7.25% per annum.

SARB Governor Lesetja Kganyago made the announcement on Thursday following a Monetary Policy Committee (MPC) meeting.

The cut is the third since the advent of COVID-19 in the country in March. In that month, the SARB Monetary Policy Committee cut the repo rate by 100 basis. A second 100 basis points cut was announced in April.

The pandemic has had major health, social and economic impacts, presenting challenges in forecasting domestic economic activity.

“The compilation of accurate economic statistics will also remain severely challenged. Even as the lockdown is relaxed in coming months, for the year as a whole, investment, exports and imports are expected to decline sharply. Job losses are also expected to be widespread,” he said.

The governor said the easing of the lockdown will support growth in the near term and some high frequency activity indicators show a pickup in spending from extremely low levels.

However, he said, getting back to pre-pandemic activity levels will take time. GDP is expected to grow by 3.8% in 2021 and by 2.9% in 2022.