ECONOMIC WEEK AHEAD: Reserve Bank seen to hold repo rate steady
An interest rate cut is starting to become a possibility but the Bank is more likely to pause for now
The major domestic economic event this week will be the July meeting of the Monetary Policy Committee (MPC). An interest rate cut is starting to become a possibility as a result of slower growth and falling inflation but the Reserve Bank is more likely to pause for now. First up, on Wednesday, Statistics SA will release the consumer price index (CPI) for June. First National Bank (FNB) senior economist Mamello Matikinca is expecting headline inflation to have eased further in June to 5.1% year on year from 5.4% in May, largely due to a decline in fuel prices. Several surveys have noted that SA’s inflation momentum is softening on lower food price inflation, a lower rand-denominated oil price, relative rand resilience and the absence of demand-led inflation pressures in the economy. According to Citi Bank, there are fewer items in the CPI basket rising now than in all the years since 2010. The last time core inflation was as low as 4.8% was in April 2010 in the aftermath of the globa...
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