Of 21 economists in a Bloomberg survey, 11 predict a 50 basis-point reduction, while the balance expect the rate to be lowered by 25 basis points.
Forward-rate agreements show traders have switched from pricing in a less than 50% chance of a 25 basis-point cut three weeks ago to betting on a 100% chance that the central bank will cut by 50 basis points.
In addition to the US Federal Reserve cutting its main interest rate twice this month to near zero, emerging-market peers Pakistan, Turkey and Egypt eased by between 75 and 300 basis points this week. “This could add 0.3 percentage points to economic growth over the next 12 months. And there is no risk to the inflation outlook from this suggested stimulus.”
President Cyril Ramaphosa said the government was planning fiscal measures to support the economy, but with a budget deficit close to a 30-year high the scope to do so is limited.
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