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No move in rates expected

Cape Town - The Monetary Policy Committee (MPC) of the SA Reserve Bank (Sarb) will most likely keep the interest rate the same at its next meeting on Thursday, according to the latest Nedbank Interest Rate Barometer.

"Nedbank Group’s view is for a hike of 25 basis points (bps), although the risks of a hike have materially decreased since our last Interest Rate Barometer, lending a downward bias to Nedbank Capital’s particular view - based on this barometer)," said Nedbank in a statement.

As such, Nedbank Capital’s view is for an unchanged repo rate at this meeting.

"Future policy direction remains largely data dependent, specifically on the inflation trajectory and the rand," said Nedbank.

"However, the probability of the Sarb pushing out the hiking cycle has risen, given expectations for the global interest rate trajectory to remain flatter for longer."

The interest rate barometer considers the factors influencing the decision of the Sarb’s MPC in the statement accompanying the previous meeting’s interest rate decision in September, as well as developments since the previous meeting, which could influence the rate decision.

The factors are rated as a likely hike, hold or cut and are weighted into three broad categories, namely global economy (20%), domestic economy (40%) and major inflation drivers (40%).

Of the 13 factors analysed in the table, ten support expectations for an unchanged policy, while two factors favour a cut and one favours a hike.

Using the weightings, there is a 77% bias for rates to be unchanged, a 10% bias for a hike, and a 13% bias for rates to be cut, according to the Nedbank Interest Rate Barometer.


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