An increase in cost pressures has led some analysts to shift their expectations to a more cautious stance from the MPC
20 March 2025 - 15:00
by Staff Writer
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Thursday’s MPC decision is expected to balance inflation risks, global economic uncertainty and domestic fiscal pressures.
The release of consumer inflation data for February and the US Federal Reserve’s decision to keep US rates unchanged have increased the chance of the Reserve Bank maintaining the repo rate at 7.50%
A Business Day survey of eight leading economists on Monday resulted in a deadlock, with half expecting a hold and half predicting a 25 basis point cut.
However, new Stats SA data showed that while annual consumer inflation remained at 3.2% in February, month-on-month inflation surged to 0.9% from 0.3% — driven by rising costs in fuel, financial services and food.
The increase in cost pressures has led some analysts to shift their expectations towards a more cautious stance from the MPC.
While the outlook for interest rates remains finely balanced, the combination of the Fed’s decision, persistent domestic cost pressures and fiscal uncertainties has made a rate hold the more likely outcome.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
WATCH: MPC expected to maintain repo rate
An increase in cost pressures has led some analysts to shift their expectations to a more cautious stance from the MPC
Thursday’s MPC decision is expected to balance inflation risks, global economic uncertainty and domestic fiscal pressures.
The release of consumer inflation data for February and the US Federal Reserve’s decision to keep US rates unchanged have increased the chance of the Reserve Bank maintaining the repo rate at 7.50%
A Business Day survey of eight leading economists on Monday resulted in a deadlock, with half expecting a hold and half predicting a 25 basis point cut.
However, new Stats SA data showed that while annual consumer inflation remained at 3.2% in February, month-on-month inflation surged to 0.9% from 0.3% — driven by rising costs in fuel, financial services and food.
The increase in cost pressures has led some analysts to shift their expectations towards a more cautious stance from the MPC.
While the outlook for interest rates remains finely balanced, the combination of the Fed’s decision, persistent domestic cost pressures and fiscal uncertainties has made a rate hold the more likely outcome.
Reserve Bank expected to hold rates steady
WATCH: Inflation steady at 3.2% in February
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