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Compiled by the Government Communication and Information System Date: 07 Sep 2010 Title: Cut in repo rate likely, say economists -------------------- Pretoria - Economists predict the South African Reserve Bank's Monetary Policy Committee (MPC) is likely to announce a 50 basis point cut in the repo rate, when it meets this week. Consensus is that the MPC, which will meet on Wednesday, will cut rates by a further 50 basis points to 6 percent. "Standard Bank is of the opinion that the MPC will cut the repo rate by 50 basis points but will closely monitor the relevant aspects of the local and global economies over the next couple of months," said the Bank in its weekly economic preview. Investment Solutions senior economist Chris Hart told BuaNews on Tuesday that the MPC will have reasonable confidence to lower rates. Hart said the possibility of a double dip recession in countries like the US cannot be cast aside as this would affect growth in South Africa. Nedbank said: "Although recently released economic indicators suggest that household demand has been firm, overall the local recovery remains fragile, with downside risks on the production side. "This, together with subdued inflation, and a strong rand, will probably prompt the MPC to cut rates one last time on Thursday." In July, the MPC kept rates steady at 6.5 percent. It has been slashed by 550 basis points since December 2008. - BuaNews |
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