The South African Reserve Bank (SARB) is expected to announce its interest rate decision on Thursday afternoon. In November the Central Bank raised its benchmark repo rate by 25 basis points to 6.75% on November 22nd 2018, surprising markets.
Reserve Bank Governor Lesetja Kganyago said keeping interest rates on hold in November and waiting for inflation developments to unfold this year, would have raised the risk of a more aggressive interest rate hike in the coming months.
Economist Dawie Roodt says he expects the repo rate to remain unchanged.
“Looking at the South African economy there are a number of factors that really changed for the better, some of these factors include things like example the recent state of the rand, the significant fall in the petrol price, also the Americans indicating that they’re not going to increase interest rate at the rate previously expected. So all these factors put together probably mean that the Reserve bank is not going to increase the interest rate again. I think the Reserve Bank is going to leave the repo rate unchanged but there is still a possibility for further increases later this year.”
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