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South Africa’s Central Bank Sees Stimulus Effects Peaking in 2021

  • Effects of unprecedented easing to ‘linger in the system’
  • Key rate set to increase as inflation tops midpoint of target
South Africa Under Lockdown Amid New Virus Strain
Photographer: Dwayne Senior/Bloomberg

South Africa’s central bank sees the impact of its unprecedented monetary policy stimulus peaking this year and boosting expansion for years to come.

While the monetary policy committee cut its benchmark rate by 275 basis points in early 2020 to a record-low 3.5% to counter the effect of the coronavirus, the changes are still filtering through to the economy and will “linger in the system for sometime, boosting growth in the outer years,” the Reserve Bank said Wednesday in its six-monthly Monetary Policy Review.