South African official discusses potential interest rate cuts amid economic growth prospects.
A Bloomberg survey of 14 economists, including heavyweights from Morgan Stanley and UBS, predicts that South Africa’s Reserve Bank will slash interest rates three more times before calling it quits. That would bring cumulative reductions to 2.25 percentage points since September 2024, bringing the benchmark to 6%. The timing, however, sparks debate—BNP sees the final cut by September, while Morgan Stanley and UBS expect the cycle to end by early 2027. The central bank has held the rate at 6.75%, citing global uncertainty and price pressures. However, stronger currency performance, rallying gold and platinum prices, stable oil costs, and declining inflation forecasts toward the 3% target indicate that further easing is likely. This could boost household spending and help revive an economy that has stagnated for over a decade.
Bloomberg