Economist weighs in on repo rate
An economist has given his predictions of next week's repo rate announcement.
"The day before that decision is made, we are likely to see the release of the October CPI inflation rate and that is expected to decline to somewhere between 3.3 and 3.5 per cent from 3.8 per cent in September. That would have been the lowest CPI inflation rate in four years," says Azar Jammine.
The Reserve Bank's monetary policy committee wraps up this year's meeting next Thursday.
Jammine believes the rate, currently at eight per cent, is likely to drop by 25 basis points for the second consecutive time.
"Even if it cuts the repo rate by 25 basis points, the repo rate will still be 7.75 per cent and in relation to a 3.5 per cent inflation rate, that represents a real interest rate 4.25 per cent which by historical standards is very high and reflects a fairly strict monetary policy."
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