The Reserve Bank monetary policy committee is likely to maintain the current repo rate on Thursday mainly because of retreating inflation, a smaller trade deficit and stronger rand. "With inflation at 6.3 year on year and falling, the bank will have to aggressively cut its inflation forecast for this year, which is currently at 6.4%," FNB economist Mamello Matikinca said. "Depending on just how much [the committee] revise their inflation number by, the meeting may well be used to signal the end of the hiking cycle and a possibility of a rate cut later this year." Producer price inflation (PPI), which Statistics SA will publish on Thursday, will also have a bearing. The February figures are expected to reveal a meaningful moderation. In January PPI slowed to 5.9% as agriculture and food producer inflation was less aggressive.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.