Another rate cut may be on the cards as SARB ponders recession

JOHANNESBURG – The SA Reserve Bank (SARB) might deliver another interest rate cut this week as it ponders easing monetary policy with deepening domestic and international economic recession as well as tumbling consumer price inflation.

The SARB’s Monetary Policy Committee (MPC) will on Thursday announce its decision on the repo rate after lowering interest rates by a collective 275 basis points since the coronavirus pandemic began.

Governor Lesetja Kganyago last month said that financial markets anticipated the repo rate to stay above 3 percent for the next few years.

Kganyago said the bank’s projections also showed much the same.

PricewaterhouseCoopers (PwC) chief economist Lullu Krugel said the SARB’s forecast of a 7percent recession this year was too conservative.