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Standard Bank Group
The SA Daily 17 January 2019

Repo likely flat

Shireen Darmalingam

  • The South African Reserve Bank’s Monetary Policy Committee will announce the first repo rate decision for 2019 at 15h00 today. The SARB will most likely factor in consumers being constrained, and therefore likely opt to keep the repo flat at 6.75%.
  • We expect the repo to remain at 6.75% this year, in line with market expectations.
  • While we expect no surprises today, Governor Kganyago’s statement at the press conference will be closely watched, as will likely changes to forecasts for 2019; indeed, the downside risks as well as revisions to both GDP and inflation could keep the bank on hold this year.
  • At the last MPC meeting in November, the SARB kept its GDP forecast for 2019 unchanged at 1.9%, while downwardly revising the 2018 growth estimate to 0.6% from 0.7%, assessing the risks as moderately to the downside. Inflation for 2019 also received a downward revision to 5.5% from 5.7%, with upside risks in the longer term.

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