Latest news with #repoRateCut
Zawya
4 days ago
- Automotive
- Zawya
South Africa new vehicle sales climb 22% in May as interest rate cut boosts confidence
South Africa's new vehicle market recorded strong growth in May 2025, with total sales rising 22% year-on-year to 45,308 units. The performance followed a long-anticipated 25 basis point cut in the repo rate by the South African Reserve Bank (SARB), a policy shift welcomed by the automotive sector as a boost to affordability, investment and industrial resilience. New passenger car sales reached 31,741 units in May, up 30% from 24,419 units in May 2024. Light commercial vehicles, including bakkies and minibuses, increased 5.8% to 10,938 units. Medium and heavy truck segments also posted solid gains, with medium commercial vehicles rising 22.7% to 660 units and heavy trucks and buses up 6.7% to 1,969 units. Dealer sales accounted for 88.4% of May volumes, with the vehicle rental industry representing 6.8%, corporate fleets 3.0%, and government 1.8%. Car rental alone made up 8.5% of new passenger car sales during the month. The SARB's action comes as inflation eases to 2.8%—below the 3%–6% target range—while the rand strengthens amid improved investor sentiment. Lower interest rates are expected to reduce borrowing costs for both consumers and manufacturers, encouraging capital expenditure, tooling upgrades and model retooling across the automotive value chain. Exports, however, fell 14.6% year-on-year to 30,112 units in May, down from 35,277 in May 2024. The decline was attributed to a major OEM halting production from mid-April to mid-May for facility upgrades ahead of a new model rollout. Year-to-date, export volumes remained 1.4% ahead of the same period last year. Naamsa also welcomed the ongoing discussions between National Treasury and the SARB on potentially lowering the official inflation target midpoint from 4.5% to 3.0%. A structurally lower inflation environment could support sustained rate cuts, improving affordability for consumers and competitiveness for exporters.
Zawya
07-02-2025
- Business
- Zawya
India's central bank delivers first rate cut in nearly 5 years
MUMBAI - The Reserve Bank of India (RBI) cut its key repo rate for the first time in nearly five years on Friday to provide stimulus to the sluggish economy, which is expected to grow at its slowest pace in four years in the current fiscal year. The Monetary Policy Committee (MPC), which consists of three RBI and three external members, cut the repo rate by 25 basis points to 6.25% after having kept it unchanged for eleven straight policy meetings. The decision was in line with a Reuters poll, where 70% of economists had predicted a quarter-point reduction, and marked the first reduction in India's key rate since May 2020. All six MPC members voted to cut the repo rate and to maintain the monetary policy stance at "neutral". The MPC noted that though growth is expected to recover, it is much lower than last year and inflation dynamics have opened space for rate easing, RBI Governor Sanjay Malhotra said in the first policy review since his appointment in December. India's government has forecast annual growth of 6.4% in the year ending in March, below the lower end of its initial projection, weighed by a weaker manufacturing sector and slower corporate investments. Growth is seen in a 6.3%-6.8% range in the next fiscal year as well. The central bank forecast growth of 6.7% next year. Improving employment conditions, recently announced tax cuts, moderating inflation and good agricultural output after a strong monsoon will help growth, Malhotra said. Though retail inflation is still well above the medium-term target of 4%, it eased to a four-month low of 5.22% in December and is seen gradually declining towards the target in coming months. The central bank sees inflation averaging 4.8% in the current financial year, easing to 4.2% next year. Food inflation pressures are expected to ease, Malhotra said, but added that volatility in energy prices pose a risk to the inflation outlook. India's benchmark 10-year bond yield was up four basis points at 6.69% after the announcement, while the rupee rose to 87.38. The benchmark equity indexes gained 0.2% each following the announcement. (Reporting by Swati Bhat and Sudipto Ganguly; writing by Ira Dugal; Editing by Savio D'Souza and Kim Coghill)
