Another interest rate cut may be on the cards

Economists are expecting the South African Reserve Bank to deliver a repeat performance of its July decision when it announced a 25 basis point cut.

FILE: Reserve Bank Governor Lesetja Kganyago. Picture: GCIS.

CAPE TOWN - The Reserve Bank will make an announcement on interest rates later on Thursday and many economists are expecting another small cut.

The Bank's Monetary Policy Committee has been meeting since Tuesday to debate its decision on the repo rate.

Economists are expecting the South African Reserve Bank to deliver a repeat performance of its July decision when it announced a 25 basis point cut to 6.75%

It was the first cut in five years, and it took many by surprise.

The Reserve Bank uses the repo rate to control inflation. The inflation rate did tick up slightly in August to 4.8% but that's still comfortably within the target band of 3% to 6%.

During the last announcement, Governor Lesetja Kganyago pointed out some risks to the inflation outlook and warned that if it changes, the central bank will not hesitate to reverse their decision.