With the very busy Festive Season retail period about to kick off, today’s (Thursday) decision by the Monetary Policy Committee to cut the repo-rate by 25 basis points could not have come at a more welcome time, says SME services provider Lula.
Reserve Bank Governor Lesetja Kganyago announced the MPC decision earlier today when he addressed members of the media.
“After years of interest rate hikes starting way back in 2021, the SME space can now finally take a breath. Things are starting to look up and it does appear that all conditions are present for a very prosperous business period for small businesses,” says Chief Risk Officer at Lula Garth Rossiter.
“Small businesses have been hampered by very difficult trading conditions for longer than anyone would like to remember. There is reason for optimism thanks to this year’s lack of load shedding combined with this weekend’s good news about our credit rating and today’s repo rate cut,” he adds.
S&P Global raised the outlook on SA’s rating from stable to positive, giving a nod of approval to the government of national unity’s reform agenda.
“Consumers should feel enormous relief after today’s announcement as this will reduce some of their debt burden and give them extra cash in their back pockets going into the festive season. Small businesses are still the lifeblood of our economy and we expect they will make full use of these favourable conditions and improving consumer confidence,” says Rossiter.
