Further relief is anticipated for South African consumers as the Reserve Banks Monetary Policy Committee MPC is widely expected to announce an interest rate cut this afternoon following its meeting.
During its last announcement in September , the central bank decided to reduce the rate by 25 basis points, putting the repo rate at 8, making it the first rate cut in almost four years.
Expectations of a rate cut were sparked by low inflation .
Yesterday, Stats SA announced a decline in consumer price inflation from 3.8 in September to 2.8 in October 2024, attributing the drop in fuel prices as the main factor.
Lead economist at KPMG, Frank Blackmore, says "Very low as far as inflation is concerned, in fact not only is it below the mid-point of the target range - it's below the target range itself - the old 3 to 6, sitting at 2.8. So, this should actually be able to justify perhaps a larger decrease or a larger cut to take place, maybe a 50-basis point rate cut in November and then perhaps incorporating also the 25 basis points were also expecting in January.
