SARB could start cutting rates this year, economist says

SARB could start cutting rates this year, economist says

An economist believes the South African Reserve Bank could soon start cutting the repo rate. 

SARB
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"They are making progress on inflation, and we can see that in inflation numbers, but its best for them to wait a little bit more before cutting interest rates, and that’s the message we got from the Reserve Bank," says Chief Economist at the Efficient Group Dawie Roodt

 

"Things are getting better, they are making progress, but we need to wait a little bit before cutting interest rates. If things remain in the current trajectory, chances are quite big that we would see a cut in interest rates in a few months."   

 

The Reserve Bank's Monetary Policy Committee left the repo rate unchanged at 8.25% on Thursday. 


The prime lending rate remains at 11.75%.  

ALSO READ: SARB keeps repo rate unchanged

 

Roodt says a lower interest rate will impact those who are saving and spending.

 

"So, if you have savings, good for you; if you want to buy something, then it becomes a little bit cheaper; buying a house, for example, will become a little bit cheaper."

 

“Lower interest rates typically stipulate an economy, while high interest rate makes it difficult for economic activities, and that's the reason why the Reserve Bank increasing interest rates recently, to slow down economic activities because of other factors."

 

"But now that the reserve bank sees that the inflation seems to be pairing out and chances are quite good and have been forwarded further, the Reserve Bank might be in the position of cutting rates out."   

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