Many economists predicting another interest rate cut on Thursday

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South Africa’s interest rates have already seen deep cuts this year, and more could follow in Thursday.

Reserve bank officials are meeting this week to decide on whether another interest rate cut will be announced.

South Africa’s struggling economy, which was largely brought to a halt during lockdown, will be the top item under discussion by the bank’s monetary policy committee.

The bank has already followed the world’s leading central banks in decisively cutting interest rates this year, by over 2% or 225 basis points.

Many economists say we could see a cut in borrowing costs of between 25 and 50 basis points this Thursday.

This is not as drastic as previous cuts, but it will make a difference to those paying off large loans.

According to financial comparison group Finder, eight out of 10 economists on their panel agree on a rate movement, but they are divided by how many basis points they think it will move.

Investec’s chief economist, Annabel Bishop and associate professor at the University of Cape Town graduate school of business, Sean Gossel, forecast a rate cut of just 25bps.

Meanwhile, Mpho Molopyane, an economist at Rand Merchant Bank, thinks the rate will decrease by 50bps, while Dawie Roodt, chief economist at the Efficient Group, forecasts a cut of 100bps.

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