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Interest rate expected to remain steady

The prime lending rate, which is the figure charged by banks to customers, is expected to remain at 10.5%.

Picture: EWN

CAPE TOWN - Inflation is expected to be at the top of the agenda during Tuesday's meeting of the Reserve Bank's Monetary Policy Committee.

The committee has left the repo rate unchanged since last March.

The prime lending rate, which is the figure charged by banks to customers, is expected to remain at 10.5%.

The South African Reserve Bank is expected to consider three factors during Tuesday's meeting.

Economist Lesiba Mothata says inflation will be among them.

“The Reserve Bank will be concerned to some degree about this higher peak in inflation, after all that is said and done they will still come out with a much improved inflation outlook over the medium term.”

Chief Investment Strategist David Mohr says the performance of the currency will play a role.

“We see the rand has been quite stable and a bit stronger over the last six months.”

Market analyst Jana van Deventer says global movements will also be considered.

“The Reserve Bank is still well aware of international developments that could have an impact on currency volatility.”

Most experts agree that the repo rate will remain unchanged at 7%.

(Edited by Neo Koza)