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Room for repo rate cut in January, says economist

Reserve Bank Governor Lesetja Kganyago cited a number of concerns, including stagnant growth and other headwinds for keeping the repo rate unchanged at 6.5%.

South African Reserve Bank Governor Lesetja Kganyago. Picture: AFP

JOHANNESBURG - With the Reserve Bank deciding to keep the repo rate unchanged at 6.5%, those with debt are hoping for a decrease next year.

Governor Lesetja Kganyago cited a number of concerns, including stagnant growth and other headwinds.

This was despite favourable inflation figures.

Kganyago said that international trade volatility and higher oil prices were just some of the headwinds challenging the country's growth.

However, Nedbank economist Isaac Matshego said that there was room for a rate decrease and the bank could decide in favour of this in the new year.

"The numbers right now indicate that there's a good chance of a cut in January, particularly if the inflation rate remains low."

Governor Kganyago said that growth was forecast at 0.5% for this year and 1.4% for 2020.

He said that inflation needed to remain in check, along with the rand exchange rate.

For now, though, many with investments will be happy with a higher rate.