Analysts believe the Bank is likely to keep the repo rate unchanged at 8.25% and commercial banks’ prime lending rate at 11.75%.

The Reserve Bank’s decision follows data from Statistics SA, which showed that inflation eased from 5.5% in November to 5.1% in December 2023.

Economist Laura Campbell says, “The decline in 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.”

“We do expect that the SARB will be closely monitoring guidance provided by key central banks such as the United States (US) Fed.  The US Fed is expected to cut interest rates but has tempered recent market expectations regarding how rapidly this will play out, but we do expect that the US Fed will cut rates sooner than the SARB,” Campbell adds.

--SABC--