THE RESERVE Bank cut its key repo rate by 100 basis points to 10,5% today, as expected, with inflation slowing and worries about economic growth mounting.

The full percentage point reduction, the biggest single adjustment in more than five years, adds to December?s 50 basis point cut that started unwinding the 5 percentage points in hikes between June 2006 and June 2008.

Targeted consumer inflation has eased sharply since hitting a peak of 13,6% in August last year, and is seen slowing further in January, aided by the introduction of a revised, and re-weighted headline measure.

The economy is under strain with consumers battling to cope with relatively high interest rates, while a global slowdown has added to pressure on industry. Interest rates are also falling globally. Sixteen economists polled by Reuters last week predicted a 100 basis point cut, with 11 anticipating the 50 basis point move.