Possible interest rate cut on the cards
PwC chief economist Lulu Krugel expects a possible interest rate cut of 50 basis points when the South African Reserve Bank (SARB) announces the new rate on Thursday.
The SARB's Monetary Policy Committee met over two days this week and is expected to make a rates announcement on Thursday.
Krugel says a number of global and domestic developments are likely to pressure the central bank into a cut.
"At this point in time we expect the Reserve Bank to start cutting the interest rates earlier. Under normal circumstances they would only do probably in the second quarter of this year but given what has happened globally with Covid-19 and trying to bolster the South African economy, we are hoping to see that they'll consider a 50 basis points cut tomorrow.”
She adds that says if it becomes a reality, the cut will come as a welcome relief to indebted South Africans.
"We are concerned about where the economy; the economy is already under a lot of stress and a lot of South Africans are currently experiencing high levels of debt so this 50 basis points cut will come as a welcome relief.
"That would mean a little more money in their pockets at the end of the month," she adds.
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