Economists predict SARB will keep repo rate unchanged
An announcement by the reserve bank’s Monetary Policy Committee (MPC) is expected on Wednesday afternoon.
The South African Reserve Bank (SARB) Governor Lesetja Kganyago in studio with Clement Manyathela.
JOHANNESBURG - Some economists expect the South African Reserve Bank (SARB) to further delay the cutting cycle for interest rates, as inflation remains elevated.
The central bank’s Monetary Policy Committee (MPC) has been locked in meetings this week to decide on the repo rate.
An announcement by the reserve bank’s MPC is expected on Wednesday afternoon.
The committee is expected to weigh a combination of factors before deciding on the repo rate.
This includes inflation expectations that generally give some insight into what inflation trends could look like in the future.
While expectations dipped for the first quarter, it’s not enough to ease the pressure off the MPC.
Efficient group economist Dawie Roodt said this and the recent increase in inflation to 5.6% is likely to see the repo rate stay higher for longer.
“The governor of the reserve bank is always expected to be a bit hawkish but I think that’s exactly what he’s supposed to do because what he wants to do is get inflation lower and inflation expectations lower.”
Nedbank chief economist Isaac Matshego said he only expects the central bank to ease policy rates in the July meeting.