Further interest rate easing expected this week
Timing of second 25-basis-point cut seen as critical
A second interest rate cut for the year is on the cards in a further reprieve for consumers as the Reserve Bank's monetary policy committee meets this week. The central bank is expected to follow through with another 25-basis-point cut after a similar move in July. Easing food inflation on the back of a bumper maize harvest, a resilient rand and lower global oil prices all support another rate cut. Inflation is expected to migrate to the midpoint of the bank's 3%-6% inflation target range until at least the second half of next year. Sanisha Packirisamy, an economist at Momentum Investments, said: "There is a narrow window of opportunity to cut interest rates. "Our projections point to inflation reversing course in the second quarter of 2018 and heading higher into 2019. To avoid the risk of making a policy error, the [Reserve Bank] is likely to front-load any further interest rate cuts." Economists mostly project inflation, which was at 4.6% in July, to be 4.9% for August. StatsSA w...
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