Markets indicate a strong chance that South Africa interest rates will be lowered next week as the Reserve Bank prepares for its final Monetary Policy Committee meeting of the year.
Addressing a media briefing on the MPC’s decision on the repo rate, SARB Governor Lesetja Kganyago said the decision to reduce the policy rate was unanimous.
South Africa’s Reserve Bank is expected to announce its latest repo rate decision this week, with current inflation and unemployment data providing key indicators.
Kganyago’s announcement comes on the heels of an announcement by Statistics South Africa that inflation had dipped to 2.8% – its lowest since June 2020.
Four members voted to keep the rate unchanged, while two preferred to cut it by 25 basis points.
The South African Reserve Bank announced the repo rate remains unchanged at 8.25%. Learn how this decision affects your daily life.
Market-based expectations for inflation in 2023 are currently 5.8%, while near-term break-even rates have dipped to 4.3%.
The GDP growth forecast for 2024 and 2025 is unchanged from the previous meeting, at 1.0% and 1.1%, respectively.
The SARB has raised the repo rate at least 10 times since November 2021. Here’s what it means for SA interest rates.
Here’s how the repo rate increase affects South Africa’s prime interest rate.
The increase means that the repo rate will now be 7.25% per year from 27 January 2023, with prime now at 10.75%.
The repo rate in South Africa reached 7% after the SA Reserve Bank’s Monetary Policy Committee (MPC) agreed to a 75 basis points hike.
The increase means that the repo rate will now be 6.25% per year from 23 September 2022, with prime now at 9.75%.
The increase means the repo rate would be 5.50% per year from 22 July 2022.