ECS3701
Assignment 2 Semester 1 2025
Unique Number: 871621
Due date: 9 May 2025
QUESTION 1
a.
The decision by the South African Reserve Bank (SARB) to keep the repo rate unchanged
at 7.5% after previously lowering it by 75 basis points reflects a cautious but supportive
monetary policy stance. This approach is likely to have a positive effect on the economy for
the following reasons:
1. Lower borrowing costs: The recent interest rate cuts mean that loans are cheaper,
which can encourage businesses to invest and consumers to spend. This stimulates
economic activity.
2. Support for economic growth: SARB explicitly mentions that the rate cuts will
―support economic activity.‖ This suggests that even though the rate has now been
held steady, the overall policy direction is still geared toward encouraging growth.
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
Assignment 2 Semester 1 2025
Unique Number: 871621
Due date: 9 May 2025
QUESTION 1
a.
The decision by the South African Reserve Bank (SARB) to keep the repo rate unchanged
at 7.5% after previously lowering it by 75 basis points reflects a cautious but supportive
monetary policy stance. This approach is likely to have a positive effect on the economy for
the following reasons:
1. Lower borrowing costs: The recent interest rate cuts mean that loans are cheaper,
which can encourage businesses to invest and consumers to spend. This stimulates
economic activity.
2. Support for economic growth: SARB explicitly mentions that the rate cuts will
―support economic activity.‖ This suggests that even though the rate has now been
held steady, the overall policy direction is still geared toward encouraging growth.
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
