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BUSA welcomes interest rate cut

15 Dec 2008

Busa has welcomed the decision by the Reserve Bank to cut the repo rate by 0,5% as being the right move in present economic circumstances. The organisation believes that even though the cut is a modest one, it will send a positive message to consumers and the business community that an upper turning point in the interest rate cycle might now have been reached.

Over 20 central banks globally have already cut interest rates and the cut means that at a time when the SA economy is also feeling the consequences of the global economic slowdown, a phase of lower interest rates can begin to reinforce whatever other policy responses will be necessary in the period ahead.

All the evidence now confirms a serious economic slowdown in SA and a widely expected low growth rate in 2009. Busa looks to the Budget in February 2009 in particular to promote appropriate fiscal and other measures that will underpin growth and job creation, as well as maximise the positive impact of lower interest rates. Busa says it strongly believes that all feasible steps should be considered to minimise the harm that external economic shocks are doing to growth and employment in South Africa.