Economists expect repo rate cut ahead of SARB announcement
Economists predict that the rates will drop by 0.25% or 25 basis points, bringing the repo rate down to 7.75% from 8.25%.
South Africa Reserve Bank (SARB) Governor Lesetja Kganyago. Picture: X/SAReserveBank
JOHANNESBURG - The South Africa Reserve Bank (SARB)'s Monetary Policy Committee (MPC) is meeting on Thursday to decide interest rates.
Economists predict that the rates will drop by 0.25% or 25 basis points, bringing the repo rate down to 7.75% from 8.25%.
The repo rate is the interest rate that determines how much the central bank lends to financial institutions.
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To maintain price stability in the economy, the SARB targets a mid-range of inflation between 3% and 6%.
Economist Dale McKinley said while everyone expects a big cut on interest rates, he thinks the opposite will happen.
"The Monetary Policy Committee has been so conservative in their management of the interest rates, they're probably not going to drop it any more than 25 basis points each time for the next maybe several months or into next year," said McKinley.