Interest rate cut possibility looms over South Africa as MPC meeting approaches

DEBT experts and economists are gearing up for what could be a pivotal moment at the end of July as South Africa's monetary landscape evolves.

- YOGASHEN PILLAY

The highly anticipated meeting of the Monetary Policy Committee (MPC) of the South African Reserve Bank (Sarb) may see a further reduction in interest rates, offering hope to beleaguered consumers grappling with escalating costs and economic uncertainty.

Casey Sprake, economist at Anchor, on Monday said the interest rate outlook continued to tilt dovish, with markets now pricing in a 66% chance of another 25 basis points cut.

"While the pace has been more gradual and staggered than initially anticipated—particularly following the last rate hike exactly two years ago—the Sarb's cautious approach has still delivered meaningful relief to highly indebted households," she said.

Sprake added that with inflation subdued, economic growth under strain, and real rates remaining restrictive, the door remains open for additional monetary support into 2025.

Benay Sager, executive head of Debt-Busters, was similarly optimistic about another cut later this month based on the slow rate of consumer inflation.