Economists weigh in on Reserve Bank's decision to hold repo rate at 7.5%
FNB’s senior economist Koketso Mano says there’s no telling how unnerved the Reserve bank is by the global developments – making it harder to predict if or when interest rates will drop any time soon.
- South African Reserve Bank (SARB)
- South African Reserve Bank Governor Lesetja Kganyago
- Economic Growth
FILE: South African Reserve Bank Governor Lesetja Kganyago. Picture: @Treasury_RSA/X
JOHANNESBURG - Economists believe the Reserve Bank will remain cautious in upcoming monetary policy committee meetings after holding the repo rate at 7-point-5 percent yesterday.
The widely anticipated decision comes amid concerns about inflation risks and uncertainties about the global economic landscape on the back of Donald Trump sponsored trade wars.
Four out of the six MPC members opted for a pause - while two others voted in favour of a 25-basis-point cut.
Inflation in advanced economies remains elevated, with both headline and core above 2% in the US, the Euro area, the UK and even Japan.
In the US, economic sentiment is volatile.
While the year started with surging stock prices and a stronger dollar - the disruptive effects of tariffs and policy uncertainty have come into focus.
FNB’s senior economist Koketso Mano says there’s no telling how unnerved the Reserve bank is by the global developments – making it harder to predict if or when interest rates will drop any time soon.
“Even the US has scale down, consumer confidence is falling so this is something that’s on everybody’s mind, it’s causing a lot of volatility, it’s causing a lot of uncertainty as well,” she said.
While some analysts believe the central bank could resume its rate cutting cycle later in the year after this breather - other economists say not to hold your breath.