How low can interest rates go?
Covid-19 has delivered such a huge disinflationary shock to the SA economy that it could keep consumer inflation below the floor of the target band for the coming year
At 3.75%, SA’s repo rate is the lowest it has ever been. But it is set to fall even lower, according to several economists who believe SA is heading for a prolonged period of below-3% inflation and negative real interest rates.
Both events would be almost unprecedented in a post-democratic SA, indicating just how deeply Covid-19 is gouging the economy.