* Domestic economy appears to be slowing further
* Bank says conditions appropriate for further accommodation
* Rand initially falls, bonds hit record lows after cut
* FRA market prices in another cut this year
* Labour wants more monetary loosing
(Adds labour reaction, analyst comment)
By Stella Mapenzauswa
JOHANNESBURG, July 19 (Reuters) – South Africa’s Reserve
Bank unexpectedly cut its benchmark rate to a record low on
Thursday, citing a weaker economic outlook and earning rare
praise from the government’s labour allies who have long
demanded monetary loosening to help create jobs.
But Governor Gill Marcus was careful to manage expectations
for more cuts that are likely to emerge from the left-leaning
allies of the ruling ANC as the party approaches a leadership
election at the end of the year.
Striking a decidedly dovish tone as she announced a 50 basis
point cut to 5.0 percent in the repo, Marcus said the bank was
concerned about the increased risks to domestic growth.