Cape Town — The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) is expected to announce it’s decision on interest rates for 2024, with repo rates and prime lending rate expected to stay the same.
SARB Governor, Lesetjka Kganyago, is expected to deliver the MPC statement at 3pm on Thursday, 24 January, and the expectation is that inflation rates will stay the same after South Africa’s monthly inflation rate dropped for a second consecutive month in December 2023, dropping to 5.1%. The average inflation rate for 2023 was 6.0 percent, 0.9 percentage points lower in 2022. StatsSA said.
Many analysts believe that the repo rate and prime lending rate will stay at 8.25% and 11.75% respectively. Economist, Laura Campbell, said the interest rates will remain unchanged until it reaches 4.5%, SABC News reported.
“The decline in CPI (Consumer Price Index) supports the view that the Reserve Bank will keep interest unchanged when they conclude their meeting. While inflation declined, it does remain above the 4,5% midpoint of the inflation target that’s punted by the SARB as the unofficial inflation target,” Campbell said.
Many other analysts and experts have predicted that inflation will remain largely subdued for 2024, hovering around 5-5.5% for the first half of the year, with a drop closer to the 4.5% average later in the year, IOL reported Nedbank’s economist Johannes Khosa, saying.
“We expect CPI to average 5% for the year. The downward pressure will mainly emanate from Brent crude oil prices, which will likely be subdued by weak global demand and translate into lower fuel prices.”
“However, the risks to our forecasts reside marginally on the upside due to the fragile rand, the uncertainty in the global oil market, the elevated food prices, and high operating costs.” he said.
WATCH LIVE: Governor @KganyagoLesetja will deliver the MPC statement today at 15:00. The press conference will be live-streamed on Facebook https://t.co/jkqyCWw0wv & YouTube https://t.co/8Ztcngcgvx. Alternatively, watch on local news channels. Use#SARBMPCJAN2024 pic.twitter.com/g9T0w43bWa
— SA Reserve Bank (@SAReserveBank) January 25, 2024
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Compiled by Matthew Petersen
