Reserve Bank is likely to cut its repo rate by 25 basis points - economist

Chief Economist at Economists.co.za, Mike Schussler says it is likely that the Reserve Bank will cut its repo rate by 25 basis points.

The Reserve Bank is expected to make an announcement when its Monetary Policy Committee (MPC) concludes its meeting on Wednesday.

It is very likely that we remain on hold for a while because the Reserve Bank has to look into the future and the future has VAT and a few other consumption taxes heading our way.

Mike Schussler, Chief Economist at Economists.co.za

According to Schussler, we also have a fuel levy on top of the 1 percentage point VAT increase as well as the introduction of sugar levy, which will take the repo rate close to 5% again.

If Eskom gets its way with the 5.2% tariff hike, Schussler says it will push it above 5%.

I think we have to be a little bit circumspect, I think there still a chance that we get that 25 basis point.

Mike Schussler, Chief Economist at Economists.co.za

I think they may just be a bit conservative because the rest of the world is slowly raising interest rates and they don't want to see the rand go south.

Mike Schussler, Chief Economist at Economists.co.za

To hear the rate of this conversation of repo rate, listen below:


This article first appeared on CapeTalk : Reserve Bank is likely to cut its repo rate by 25 basis points - economist


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