Reserve Bank expected to keep repo rate unchanged | Fin24
  • Mpumalanga Mine

    Constitutional Court rejects coal mining company’s attempt to appeal – but the saga isn’t over.

  • Audit Outcomes

    Turnaround plans had virtually no impact for ailing parastatals, the Auditor-General has found.

  • Battery Power

    Gordhan: Government intends to sign off soon on a "world class" battery storage project.


Reserve Bank expected to keep repo rate unchanged

May 19 2019 13:45
Lameez Omarjee, Fin24

The Reserve Bank is likely to keep the repo rate at 6.75% this week, economists say.

The Reserve Bank's Monetary Policy Committee (MPC) will meet for two days this week to make a decision on the interest rate which will be announced on Thursday.

In a market report, Investec economist Kamilla Kaplan said that the SA Reserve Bank (SARB) would likely remain on "guard" as it considers the inflation outlook which is expected to be higher mainly due to the increase in electricity prices, or close to the upper end of the 3% to 6% target range in 2020.

 "CPI inflation is set to rise back towards the upper end of the target range in 2020 on low base factors and high administered price increases (especially electricity)," Kaplan said.

Statistics South Africa will on Wednesday release inflation data for April, ahead of the rates announcement. "CPI inflation is projected to have remained steady at 4.5% y/y in April," Kaplan said.

In a separate market report, Investec Chief Economist Annabel Bishop said inflation is expected to rise to 5.5% in 2020. "The SARB is not expected to cut its interest rates this year," Bishop added.

Mamello Matikinca-Ngwenya, FNB Chief Economist is of the view that April inflation would "edge up" by 0.1 of a percentage point to 4.6%. The increase is mainly driven by the R1.31/l petrol price hike, Matikinca-Ngwenya said.

"On the back of muted expectations for inflation, we expect the SARB MPC to keep the repo rate unchanged at 6.75%," she added.



Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote