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Cape Town - South African Reserve Bank (Sarb) governor Gill Marcus is not likely to announce another interest rate increase on Thursday, according to a poll of 30 economists.
Twenty-three of the 30 economists polled by Reuters expect the repo rate to remain unchanged at 5.5%, despite rising inflation.
Nomura emerging markets expert Peter Attard Montalto said there will be a close call for the rates decision.
"We think it will be a very close decision with the monetary policy committee (MPC) possibly splitting 4/2 against a hike at this time".
He said Normura expects the rates to remain on hold, predicting the next hike to be in May and then again in September.
However, Credit insurance group Coface said in a statement that it expected rates to increase by another 50 basis points.
"In order to contain the inflationary pressures, we anticipate that the Reserve Bank will raise rates once more in March before keeping them on hold well into 2015."
It said there has been some pause to the rand’s slide, but it remains vulnerable.
This is because of the large current account and fiscal deficits and the change in global investor sentiment towards emerging markets.
"The MPC will probably remain hawkish until either the rand recovers lost ground or the economy weakens sharply."
The inflation rate has been close to the upper limit of the 3% to 6% inflation target range during the last few months and the decline in the rand has given rise to expectations that inflationary pressure will continue.
The MPC interest rate decision should be informed by the need to contain future inflation, said Dr Kenneth Creamer, economist at the School of Economic and Business Sciences at Wits University.
"Well calibrated interest rate policy - say an increase of between 25 and 50 basis points at the March MPC meeting - will have the effect of curbing inflation expectations, including the second round effects associated with currency weakening," Sapa reported him saying.
Data from the Reserve Bank’s latest quarterly bulletin shows that the export sector is performing below its potential because of low demand for commodities.
The mining sector and manufacturing production was also under pressure due to strikes. However, spending by consumers saw a marginal increase.
Sarb’s MPC decided to hike its key lending rate by 50 basis points in January and it also revised its growth forecasts for 2014 to 2.8%, down from 3.0%
Marcus said at the time that any further moves in the repo rate depend on data and that the bank will continue to monitor developments closely.
Twenty-three of the 30 economists polled by Reuters expect the repo rate to remain unchanged at 5.5%, despite rising inflation.
Nomura emerging markets expert Peter Attard Montalto said there will be a close call for the rates decision.
"We think it will be a very close decision with the monetary policy committee (MPC) possibly splitting 4/2 against a hike at this time".
He said Normura expects the rates to remain on hold, predicting the next hike to be in May and then again in September.
However, Credit insurance group Coface said in a statement that it expected rates to increase by another 50 basis points.
"In order to contain the inflationary pressures, we anticipate that the Reserve Bank will raise rates once more in March before keeping them on hold well into 2015."
It said there has been some pause to the rand’s slide, but it remains vulnerable.
This is because of the large current account and fiscal deficits and the change in global investor sentiment towards emerging markets.
"The MPC will probably remain hawkish until either the rand recovers lost ground or the economy weakens sharply."
The inflation rate has been close to the upper limit of the 3% to 6% inflation target range during the last few months and the decline in the rand has given rise to expectations that inflationary pressure will continue.
The MPC interest rate decision should be informed by the need to contain future inflation, said Dr Kenneth Creamer, economist at the School of Economic and Business Sciences at Wits University.
"Well calibrated interest rate policy - say an increase of between 25 and 50 basis points at the March MPC meeting - will have the effect of curbing inflation expectations, including the second round effects associated with currency weakening," Sapa reported him saying.
Data from the Reserve Bank’s latest quarterly bulletin shows that the export sector is performing below its potential because of low demand for commodities.
The mining sector and manufacturing production was also under pressure due to strikes. However, spending by consumers saw a marginal increase.
Sarb’s MPC decided to hike its key lending rate by 50 basis points in January and it also revised its growth forecasts for 2014 to 2.8%, down from 3.0%
Marcus said at the time that any further moves in the repo rate depend on data and that the bank will continue to monitor developments closely.
