Will South Africa use new ECB repo lines?

South Africa's central bank governor expressed keen interest in utilizing new, more accessible European Central Bank repo lines to support trade and investment with Europe.

What is the outlook for South Africa's interest rates?

South Africa's central bank governor indicated that the country's interest rate-cutting cycle is still ongoing, with further reductions anticipated this year and next, dependent on inflation trends.

Are emerging markets trying to replace the U.S. dollar?

Emerging market economies, according to South Africa's central bank governor, are not deliberately attempting to dethrone the U.S. dollar but are seeking to protect themselves from financial system vulnerabilities.

Home / Business and Economy / SA Central Bank Eyes Cheaper Euro Funds Amid Rate Cut Cycle

SA Central Bank Eyes Cheaper Euro Funds Amid Rate Cut Cycle

8 Feb

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Summary

South Africa may use new, cheaper ECB repo lines to boost trade.
Central bank governor indicates interest rate cuts are ongoing.
Emerging markets seek financial system protection, not dollar dethroning.

SA Central Bank Eyes Cheaper Euro Funds Amid Rate Cut Cycle

South Africa's central bank is expressing interest in leveraging new European Central Bank (ECB) repo facilities. Governor Lesetja Kganyago indicated that these lines, intended to make euro liquidity more accessible, could benefit South Africa due to its significant trade and investment ties with Europe. He suggested that such access would help underpin bilateral trade, calling it a 'welcome development.'

On domestic monetary policy, Kganyago confirmed that South Africa's interest rate-cutting cycle has not concluded. The decision to maintain rates at 6.75% in the previous month signals that the terminal rate is still distant. Policymakers are awaiting further inflation slowdowns before altering rates, with projections suggesting two more 25-basis-point cuts this year and an additional cut next year, though these are flexible.