JOHANNESBURG - Economists on Wednesday said that they expect the South African Reserve Bank (SARB) to cut the repurchase rate (repo rate) by 25 basis points in a bid to stimulate economic growth.
The central bank had forecast in May that South Africa's growth would reach one percent in 2019. The reduction in repo rate would also trigger banks to decrease their interest rates to 10 percent as well, down from 10.25 percent.
In May, SARB's monetary policy committee (MPC) unanimously decided to keep the repo rate unchanged at 6.75 percent per year while economic growth forecast was revised down. Some MPC members were even keen to cut the repo rate in May already.
South Africa's central bank last raised the repo rate by 25 basis points in November to stem inflation pressures.
Annabel Bishop, Investec Bank chief economist, said while the SARB does not target inflation in the immediate term, consumer price index (CPI) inflation was expected to remain moderate in the foreseeable future.