'We expect an interest rate cut on Thursday. But it won’t help the economy much'

FILE: Reserve Bank governor Lesetja Kganyago. Picture: EWN.

We’re looking at 25 basis points [cut]… I don’t think they’re going to be willing to do more than that… upward inflation trend in the next few months… they’ll be mindful of that… and medium-term concerns regarding the credit rating review…

Kevin Lings, Chief Economist - Stanlib Asset Management

Most economists - with some notable exceptions - expect the South African Reserve Bank’s (Sarb) Monetary Policy Committee (MPC) to cut interest rates by 25 basis points on Thursday.

Although the Sarb officially targets an inflation rate of between 3% and 6%, it aims for the 4.5% mid-point.

The inflation rate (consumer price index) was 4.5% in May this year (the latest available figure), a slight increase from 4.4% in April.

The Money Show’s Bruce Whitfield interviewed Kevin Lings, Chief Economist at Stanlib Asset Management.

Listen to the interview in the audio below (and scroll down for more quotes from it).

There’s a strong expectation that the US will start cutting interest rates at the next [Fed] meeting…

Kevin Lings, Chief Economist - Stanlib Asset Management

If we cut interest rates aggressively… it puts the rand under pressure…

Kevin Lings, Chief Economist - Stanlib Asset Management

I don’t think a cut in interest rates will help [the economy] a lot…

Kevin Lings, Chief Economist - Stanlib Asset Management

…All the factors are aligning to give the Reserve Bank scope to cut…

Kevin Lings, Chief Economist - Stanlib Asset Management

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