Mahlangu described it as a sign of independent thinking and a potential catalyst for boosting intra-African trade.
The SARB’s Monetary Policy Committee (MPC) announced on Thursday that the repo rate would be lowered to 7%, with the prime lending rate dropping to 10.5%. The move comes amid mounting global economic uncertainty, including the looming implementation of punitive United States (US) tariffs on SA exports from August.
Mahlangu commended the central bank for not merely mirroring the decisions of the US Federal Reserve. “It’s encouraging to see SARB responding to domestic conditions rather than simply copying global trends,” he said.
He added that the rate cut could also help offset the economic impact of reduced trade with the US by providing breathing room to shift exports toward African markets. “An export diversification strategy hinges on two things: expanding into new markets and diversifying the product or service offering,” Mahlangu explained.
He said the African Continental Free Trade Area presents a unique opportunity for SA to redirect trade flows away from the US and deepen its economic footprint on the continent. “If you look at the quality of SA products, they would make a lot of sense for African markets. The Free Trade Area becomes a vehicle to get SA exports into Africa.”
“SA is already trading with countries like Mozambique and Nigeria, but more can be done,” he added. “The surplus that may result from a decline in US trade can be re-routed into the continent.”
–SABC/ChannelAfrica–
