Cape Town – The South African Reserve Bank is expected to maintain interest rates at its upcoming meeting, despite headline inflation being above the preferred target of 4.5%.
Some economists suggest that the bank may have completed its hiking cycle, anticipating a decrease in inflation due to shrinking consumer spending and slowing credit growth.
There is speculation of a cumulative 100 basis points cut in 2024, starting possibly in May, but this timeline may be delayed to July if the rand experiences a significant decline before the elections, eNCA reported.
The governor of the South African Reserve Bank (SARB), Lesetja Kganyago, is set to reveal the decision of the Monetary Policy Committee (MPC) regarding adjustments to the country’s repurchase rate (repo rate) on Thursday.
Despite a reduction in inflation from July 2022 highs to 5.5% in November 2023, experts expect inflation pressures to persist due to factors such as food prices (around 9%) and high electricity costs (15.2%), according to IOL.
The consensus is that interest rates will likely remain unchanged throughout the first half of the year, with potential decreases later in the year, depending on international economic conditions.
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Compiled by Betha Madhomu
