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Will The Reserve Bank Cut The Repo Rate?

On the 28th of March, the Reserve Bank Monetary Policy Committee (MPC) will review the Repo rate (which affects how much % you pay on your credit).

Many economists are saying that consumers could be in for a Repo Rate cut.

Positive Factors

The Consumer Price Index puts inflation at a very low 4.4% at the start of the year. Its lowest level since 2015. This is a key factor which the MPC consider when working out whether to raise or drop the Repo Rate.

The Rand has also had a strong showing against a purposely devalued Dollar which has helped offset the recent hike in petrol costs worldwide (and the huge increase in the Petrol Elvy which will soon impact prices countrywide).

The recent positive reaction to the new President and Budget Speech are also considered positive factors towards a possible rate cut.

Good For Investment Ratings?

A cut in Repo Rate and the recent political developments may prompt the rating agencies to consider a positive change in the current ‘Junk’ status which has hit SA’s investment potential. At present, only Moody’s has rated SA as somewhat investment worthy (at high risk).