The 1 % cut in the interest rate, down to 14 %, is widely welcomed, and should be excellent news for the tourism industry.   

The announcement by Reserve Bank Governor Tito Mboweni yesterday was accompanied by a warning to local politicians about the global credit crunch, and the effect that it could have on South Africa.   “We are going to go through a rough patch over the next three or four years”, he said, reports Business Report.  He did not foresee a recession for South Africa, but described the recent World Economic Forum as “a memorial service for the world economy”!

Mboweni wanted to cut the rate by 2 percentage points, he said, but stated that his committee had urged him to take a more cautious approach to the interest rate cut.  A further 1 % cut in April appears likely.

The interest rate cut good news should offset the disappointing increase by 61 cents per litre in the price of petrol earlier this week.

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