(For poll results, click on )
By Stella Mapenzauswa
JOHANNESBURG, March 23 (Reuters) – South Africa’s Reserve
Bank will probably keep its repo rate at its current three
decade lows next week to give the struggling economy more
leeway, although higher electricity and fuel costs could force
it to start tightening policy later in the year.
All 24 economists polled by Reuters expect the Reserve
Bank’s Monetary Policy Committee to keep the repo rate at which
it lends to commercial banks unchanged at 5.5 percent next
Thursday, with 12 seeing no change throughout 2012.
The majority view is that the next move for rates will be
up, with ten analysts expecting 50 basis points to be tacked on
before the end of this year.
Only one economist sees another cut to 5.0 percent in the
repo during the third quarter, adding to 6.5 percentage points
of reductions in the two years to November 2010.
Government bonds sold off aggressively when unusually
hawkish comments on inflation from Reserve Bank Governor Gill
Marcus last week led some market players to price in the
stronger likelihood of higher rates by year-end.
But data on Thursday showed targeted consumer inflation
slowed unexpectedly to 6.1 percent in February, suggesting it
might ease back into the Reserve Bank’s mandated 3-6 percent
target band earlier than expected.
It has been above the band since November last year.
Continued…
