All eyes on Reserve Bank interest rate decision
SA’s central bank is expected to hold its repo rate at 6.75% in 2019 after raising interest rates in November 2018
Reserve Bank governor Lesetja Kganyago is expected to announce no change to the central bank’s 6.75% repo rate at 3pm on Thursday. By convention, South African commercial banks add 3.5 percentage points to the repo rate when quoting their benchmark prime rate for home, car, credit card and other interest rates. This means the prime rate is likely to remain level at 10.25%.
“Contrary to the timing of the last monetary policy committee meeting in November, the start of 2019 has seen risk-aversion abate somewhat in global markets as commentary from US monetary authorities has become less hawkish,” Investec Bank economist Annabel Bishop said in a note e-mailed on January 10. “At the last monetary policy committee meeting, the Reserve Bank delivered a 25 basis point hike, citing concerns over rising interest rates in the US. With these concerns now likely somewhat abated, there is a high likelihood the Reserve Bank will leave the repo rate unchanged next week.” Nedbank’s economic t...
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