South Africans are likely to experience another interest rate hike this year before rates are expected to start falling from September:
: “Senior Economist at Absa Corporate and Investment Banking Peter Worthington said SA’s real repo rate is now above consumer price inflation. The Monetary Policy Committee looks at the real repo rate when making its decision, not the nominal rate.”
“This affects our monetary policy call such that we think that the 25-basis-point hike that SARB did in January was the final one.” Worthington said, “We have been pencilling them in to start in September, but only 50 basis points of cuts. Our domestic fundamentals suggest that we could cut in September, and I don’t think that we necessarily need the Fed to cut before us.
Head of fixed income and currency research at Absa, Michael Keenan said, “Risky assets, such as the rand are going to struggle. And then on top of that, we’ve got our own idiosyncratic concerns, which really come down to our growth outlook and our growth potential.
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