The South African Reserve Bank governor Tito Mboweni has given consumers some respite by reducing the repo rate by 0,5 percent to 11,5 percent - the first reduction in three years.
This is good news for the economy and consumers who are already burdened by debt.
The rate cut is in line with a concerted global move by central banks to restore stability to financial markets.
The repo rate rose as high as 13,5 percent in September 2002, before receding to 7 percent in April 2005, with the current tightening cycle beginning in June 2006.
Pressure has been mounting on the Reserve Bank to start cutting rates - given the overwhelming evidence of local and global economic weakness and the risk of falling behind the curve.
The country's economic data confirms that our economy is taking strain from falling domestic demand - a trend exacerbated by the weakening global landscape.
Mboweni's move is indeed good news for consumers who have a mortgage and debt millstone hanging around their necks but bad news for those who rely on interest income from investments.
We hope the rate cut is the beginning of steps to provide some relief for the hapless consumer who is experiencing tough times amid the global economic downturn.