Repo rate likely not changing – Morgenrood

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THANDI XABA

The weakening rand and the effect of inflation is worsening the country’s current accounts deficits. This comes after the Consumer Price Index (CPI) annual inflation rate reached 6.4 percent for urban areas in August.

PSG economist Amelia Morgenrood says the repo rate will mostly likely not change after South African Reserve Bank Governor, Gill Marcus makes the announcement tomorrow.

“The reserve bank has a challenge ahead and unfortunately the CPI figure of 6.4% is a little disappointing. Yet a positive aspect in the inflation outlook is the oil price going substantially down in the last week or two,” she says.

Marcus announced the repo rate will increase by 0.25 percent to 5.75 percent in July, in January the committee increased the repo rate by 50 basis points to 5.5 percent while in March and May the repo rate remained unchanged.