SA’s Central Bank joins easing club with 25bps cut

The South African Reserve Bank (SARB) has joined the global trend of central banks easing monetary policy by announcing a 25 basis points cut in local interest rates. This decision comes after a week that saw interest rate cuts by both the U.S. Federal Reserve and the SARB, causing the South African rand to soften in early trade. CNBC Africa's Palesa Mofokeng was present at the Monetary Policy Committee (MPC) meeting where Governor Lesetja Kganyago made the announcement. During the meeting, the Governor addressed concerns about the timing of the rate cut and whether the SARB was behind the curve. Governor Kganyago emphasized that the decision was driven by an assessment of the balance of risks and the policy stance was not about trying to be ahead of the curve or preemptive. He highlighted that the SARB's quarterly projection model (QPM) serves as a policy guide that can change from meeting to meeting, and while the model predicts another 25 basis points cut in November, the actual decision is not made mechanically but rather through vigorous debates and data-dependent analysis. The SARB's commitment to data-driven decision making was emphasized, as Governor Kganyago humorously stated, 'the one thing we do here to arrive at a decision, we beat the data until it confesses.' The MPC meeting showcased the depth of analysis and thorough consideration that goes into shaping South Africa's monetary policy.