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Vol 50 No 8

Published 17th April 2009

South Africa

It's the political economy, stupid!

The economy contracted in the first quarter of 2009 and South Africa is entering its first recession in 17 years. The South African Reserve Bank has cut its repo rate (the rate at which banks can borrow money from a central bank) by 250 basis points to 9.5% since December, in response to slowing inflation and economic strain. Analysts believe that rates will fall by another 2.5 percentage points this year.

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