The MPC is set to announce on January 30 whether interest rates will change. While many are hopeful for a rate cut, the outcome remains uncertain.
“The MPC has consistently taken a cautious approach in each of these meetings. While many had hoped for larger and more timely rate cuts, the outcomes have repeatedly fallen short of expectations,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
In their previous statement released in November, Lesetja Kganyago, Governor of the South African Reserve Bank, stated that the “forecast sees rates easing further in future, stabilising a bit above 7%. But this rate path from the Quarterly Projection Model remains a broad policy guide.” Given that the Reserve Bank sees interest rates dropping to around 7% within the near future, there is reason to be cautiously optimistic about a possible rate cut in January. Inflation is still well within the Reserve Bank’s target range, sitting at 2,9% in November 2024. But, the Rand has also weakened against the dollar and oil prices remain volatile.
While further interest rate cuts cannot be guaranteed, Goslett eases consumers by saying that, “unless circumstances take a dramatic change for the worse, it is not expected that interest rates will increase any further this year. At best, we should see interest rates drop to around 7% over the course of the year, and at worst, interest rates should hopefully just remain unchanged at the current rate of 7.75%,” says Goslett.
“Ultimately, my hope is that we will start to steer away from an overly cautious approach and give the economy a much-needed boost by cutting rates more aggressively over the course of this year,” Goslett concludes.
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