17 of 20 economists predict the repo rate will be kept steady next month.
The South African Reserve Bank is likely to leave its repo rate unchanged this year before kicking off a cutting cycle in early 2024, chopping 25 basis points in every quarter as inflation slows closer to its comfort level, a Reuters poll found. If this happens, South Africa’s Reserve Bank will join a list of emerging market central banks that have either already begun cutting rates or will embark on a loosening path after tightening to brake inflation long before many developed nations.
There are risks, however, to the largest component of the CPI, food prices, due to the combination of climate change and El Nino conditions. A sister poll suggested the US Federal Reserve is likely done raising interest rates and a slight majority of economists surveyed now expect the central bank to wait at least through end-March before cutting them. In South Africa, inflation is expected to slow further in the coming months and average 4.9% next year from 5.9% this year and then fall to 4.
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