Repo rate lowered to 7.75 as expected
Kganyago stresses global and domestic risks
Further cuts seen in 2025 but in small steps

PRETORIA, Nov 21 Reuters South Africa39;s central bank opted for another small cut to its main interest rate on Thursday, stressing a tough global backdrop and uncertain domestic outlook despite inflation falling below its target range for the first time in years.

The decision to lower the repo rate by 25 basis points bps to 7.75 was unanimous, with no discussion about a larger 50 bps cut, South African Reserve Bank Governor Lesetja Kganyago told reporters.

Most economists had expected a 25 bps reduction, the same size of cut as in September.

But a small minority thought the SARB would go for a bolder 50 bps cut in the wake of Wednesday data showing annual inflation slowed to 2.8 in October, its lowest level since the peak of the COVID19 pandemic in mid2020.

Kganyago stuck to his trademark cautious tone, however, playing up global risks including that interest rates could shift higher again and domestic price pressures from items like food, electricity and water.

A disinflation process is there, but it is clearly a very bumpy road, and it is making central banks cautious across the board, he said. The problem that the world economy is in at the moment is that the stars are covered by clouds.

Kganyago said rand weakness in the wake of Donald Trump39;s U.S. election victory showed how rapidly changes in the global environment affect…