South Africa - Pretoria - 28 March 2019 - South African Reserve Bank governor, Lesetja Kganyago. Picture: Thobile Mathonsi/African News Agency(ANA)
JOHANNESBURG - South African Reserve Bank (Sarb) Governor Lesetja Kganyago will announce today the bank's latest decision on interest rates following the three-day meeting of the monetary policy committee (MPC) which he chairs.

Ahead of the announcement the MPC was widely expected to cut interest rates by at least 25 basis points for the first time since March 2018 on weak economic growth, subdued inflation and the dovish global monetary climate.

Inflation rose to 4.5 percent in May from 4.4 percent in the prior month, but still in the mid-point of the Sarb’s target range of 3 to 6 percent. Bank of America Merrill Lynch said its researchers had pencilled in the 25 basis point cut to be followed by two cuts in September and January. 

“The rand stands to benefit disproportionately from risk-in emerging markets (EMs). Real 10-year yields based on core inflation is 5 percent, the highest since 2011 and substantially above many major EM peers,” Merrill Lynch said. 

Yesterday, retail sales in South Africa increased 2.2percent year-on-year in May following an upswing of 2.7percent the previous month, raising hopes that the much-anticipated expected interest cut today would provide a further boost to embattled households’ bottom lines.