The Reserve Bank’s monetary policy committee will announce it’s decision on the interest rate tomorrow at the end of a two day meeting.The committee needs to decide whether or not to adjust the current repo rate of 12%.
There is plenty of speculation as to whether or not they may lower it because of a number of central banks around the world announcing there is a possibility that they may drop their interest rates due to the global financial turmoil at the moment.Australia was one of these countries and then surprised some people by jumping ahead and dropping their rate with 1percentage point to 6%.
At this stage concerning South Africa most economists are predicting that the repo rate will remain the same and that South Africa will not follow the example set by Australia and other countries.They are pointing to a possible 0.5percentage point reduction after the December Reserve Bank MPC meeting with no further increases or other decreases for the remainder of the year.
However an investment strategist from Investec Asset Management has said that he does expect South Africa to lower their rate aswell.
With the differences of opinion we are seeing we will just have to wait until tomorrow and hear what they have to say.There is definitely more excitement to come in global finance aswell.Over twenty central banks from around the world are expected to review and possibly make changes to their monetary policies and perhaps even adjust their interest rates in an effort to stimulate activity in the global economy.
