JOHANNESBURG (Reuters) – South Africa’s central bank cut its main lending rate by a further 25 basis points on Thursday, to a new record low of 3.50%, as the COVID-19 pandemic strangles the economy and keeps a lid on inflation.

The decision comes on top of 275 bps of rate cuts earlier this year and was in line with the prediction of 13 of 28 economists in a recent Reuters poll.

“The (monetary policy) committee notes that the economic contraction and slow recovery will keep inflation well below the midpoint of the target range for this year,” Reserve Bank Governor Lesetja Kganyago told a news conference.

“Inflation is expected to be well contained over the medium-term, remaining close to the midpoint in 2021 and 2022.”

The central bank met after data last week showed that consumer inflation fell to 2.1% year on year in May, its lowest in more than 15 years, from 3.0% in April.

That is below the bank’s target range of 3% to 6%.

The central bank now expects gross domestic product to contract 7.3% in 2020, versus an earlier prediction for a 7.0% contraction.

South Africa has recorded the most coronavirus cases in Africa, with total infections just shy of 400,000 and rising by more than 10,000 a day in recent days.