Some economists predict repo rate will remain unchanged following CPI drop
The South African Reserve Bank's Monetary Policy Committee is set to announce its decision on the country's repo rate on Thursday afternoon.
JOHANNESBURG - Some economists are predicting that the repo rate, currently at 8.25%, will remain unchanged.
The South African Reserve Bank's (SARB) Monetary Policy Committee (MPC) will announce its first rate decision for 2024 on Thursday afternoon.
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In 2023, the committee kept the repo rate unchanged for three consecutive times, bringing much-needed relief to consumers.
In May 2023, the MPC increased the repo rate to 8.25% - the highest it had been since 2008.
Two months later, the committee kept the repo rate unchanged after increasing the benchmark interest for 10 consecutive times.
Some economists are hopeful that this trend will continue, as inflation remains within SARB’s target of between three and six percent.
On Wednesday, the Consumer Price Index (CPI) for December dropped from 5.5% to 5.1%.
Economist Bonke Dumisa said the CPI would play a significant role in Thursday's decision.
"The major reason for this is the inflation rate seems to be on a downward trend. Remember, it was high up there about there at about 7.8%, and then it started going down.”
Sharing the same sentiments, another economist, Dale McKinley, said the decline in overall inflation pointed to another hold in interest rates.