South Africa's central bank surprised markets with a 50 basis point cut in the repo rate to 7.0 percent on Thursday on signs that the country's first recession in 17 years might be deeper than previously thought.
The central bank in June paused a monetary loosening cycle it started in December on worries about inflation and most analysts had suggested it would wait for more signs of easing price pressures before cutting again.
However, recent data show consumer spending and factory and mining output continue to fall, pointing to another GDP contraction in the second quarter after the economy shrunk by 6.4 percent in the first three months of the year.
The latest rates decision takes the repo rate to a four-year low and brings total cuts since December to 5 percentage points, unwinding rate hikes made between June 2006 and June 2008.
The central bank's targeted headline consumer inflation slowed to 6.9 percent year-on-year in June and is seen braking further as food prices ease.
Only three of the 26 economist polled by Reuters last week saw the Reserve Bank cutting the repo rate by 50 basis points, with 23 forecasting rates would be left unchanged. - Reuters