SARB poised to reduce interest rates again despite inflationary pressures

SARB expected to act in dealing with mounting pressure from rising inflation

- SIPHELELE DLUDLA

THE South African Reserve Bank (Sarb) is expected to moderate its monetary policy stance once more on Thursday despite mounting pressures from rising inflation, export tariffs, and modifications to administered prices.

This move would reflect the bank's responsiveness to an evolving economic landscape, which is increasingly characterised by unpredictability.

With the annual headline consumer inflation rates remaining ticking up from 2.8% in May to 3.0% in June, analysts are closely monitoring how the Sarb will navigate the delicate balance between stimulating economic growth and curbing price escalation.

The influence of global market trends, particularly those relating to commodity prices and supply chain disruptions, cannot be overstated as these factors play a crucial role in shaping local inflationary pressures.

Market watchers on Monday were also seeking clues on potential rate cuts despite expectations of no immediate changes ahead of the US Federal Reserve's policy meeting on Wednesday.

Samuel Seeff, chairman of the Seeff Property Group, on Monday renewed his call for the Sarb to take a bold approach and provide another rate cut of at least 25 basis points.