‘Room’ for repo rate cut on Thursday - economist
The Reserve Bank’s repo rate announcement Thursday afternoon could contain some good news for indebted South Africans.
"There certainly is room to cut interest rates, but of course, there are many other factors at play as well. For example, the recent movements in the exchange rate of the currency and general economic conditions. But the inflation data about release and inflation numbers can be much better than expected.
"I think some of us all know that the Reserve Bank is, in fact, going to cut interest rates. So, if I had to make a bet, maybe it is for a 25 basis points reduction in the repo rate," said Chief Economist at the Efficient Group, Dawie Roodt.
On Wednesday, Statistics South Africa revealed consumer inflation held steady in February, remaining unchanged from January’s 3.2%.
Roodt said that although a 25 basis points cut wouldn't make much of a difference, it would likely lead to some relief when the previous cuts are taken into account.
"The reality is that we've seen a number of interest rates cut recently. We are likely to see a significant reduction in the petrol price next month. If you add all this together, then certainly, the average consumer in South Africa is today in a slightly better position than a couple of months or a year or so ago.
“It's perhaps not that much, but everything adds up. Eventually, this is certainly going to support the average consumer."
The repo rate is currently 7.5%.
