Seeff calls for bold 50 basis point Interest Rate cut to boost economic growth

• Seeff urges a 50bps interest rate cut to stimulate economic growth and job creation
• Inflation has dropped to 3.2%, well within the Reserve Bank’s target range
• The stable Rand and falling oil prices provide a strong case for a bold rate reduction.

Seeff advocates for bold 50 basis point Interest rate cut to stimulate economic growth

‍Samuel Seeff, Chairman of the Seeff Property Group, has urged the Reserve Bank to act boldly in response to current economic conditions by implementing a 50 basis point (bps) interest rate cut this week.

He argues that such a move is essential to align the interest rate with prevailing economic realities and to take full advantage of the current positive conditions.

Economic conditions favour a rate cut

‍According to Seeff, the time is ripe for the Reserve Bank to make a decisive move, as several factors suggest that a reduction in interest rates is both feasible and necessary. Notably, inflation has decreased significantly, dropping to 3.2% in January, well within the Reserve Bank's target range of 3% - 6%. This marks a substantial improvement from 2023’s average inflation rate of 6% and the 2024 average of 4.4%, as reported by StatsSA.

Seeff also points to a sharp decline in global oil prices, which have dropped to around USD 70 per barrel, well below expectations. This reduction in oil prices is expected to further contain inflation or at least prevent it from rising again. Coupled with a stable Rand, which has strengthened following the expulsion of South Africa’s ambassador by the Trump administration, these factors make a compelling case for a rate cut.

The Case for a Bold 50bps Cut

‍Seeff emphasises that while a 25bps reduction would be a positive step, it would not be enough to stimulate the economic growth South Africa desperately needs.

Seeff argues that a bold 50bps cut would provide much-needed relief and boost both the property market and the broader economy. The gap between inflation and the current interest rate remains too wide, with the prime rate sitting at 11%, a full 100bps higher than the pre-COVID rate of 10% in January 2020.

By reducing the interest rate, Seeff believes the Reserve Bank could invigorate economic activity, increase property market transactions, and, most importantly, stimulate job creation—a crucial factor in the country’s recovery and growth.

A critical moment for economic action

‍With inflation under control and the Rand stable, Seeff stresses that now is the time to act. The opportunity to reduce interest rates presents a critical juncture for the economy, and a bold move could have far-reaching benefits.

Seeff calls on the Reserve Bank to take decisive action, highlighting that a 50bps cut is not just an option - it’s an economic imperative.‍