The Reserve Bank of South Africa has cut rates by 3 percentage points since January in an effort to counter the effects of COVID-19 and the lockdown on the economy.
Lower rates mean consumers pay less on debt and the money saved theoretically could be spent on goods and services, boosting the economy.
Chief Investment Officer of Makwe Fund Managers, Makwe Masilela said that it is possible that the rates are slashed a bit more if the Covid 19 Situation worsens.
He said that In some European countries interests rates when purchasing goods is at Zero percent and with the inflation threat now at Zero the South African Reserve Bank might even decrease the rates in the next four to six months.
South Africa has been facing an economic downfall which has worsened now because of the Covid 19 pandemic as businesses are closing down and people losing jobs.
Makwe Masilela said if the government is going to stabilise the situation they need to come up with monetary or economic policies and implement them in time before the situation gets out of hand.
