{"id":56650,"date":"2023-11-16T16:53:21","date_gmt":"2023-11-16T16:53:21","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/economists-reverse-interest-rate-expectations-for-south-africa"},"modified":"2023-11-16T17:03:44","modified_gmt":"2023-11-16T17:03:44","slug":"economists-reverse-interest-rate-expectations-for-south-africa","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/economists-reverse-interest-rate-expectations-for-south-africa","title":{"rendered":"Economists reverse interest rate expectations for South Africa"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>Economists at the Bank of America have shifted their expectations for the South African Reserve Bank\u2019s next policy move, now falling in line with the wider expectations that the Monetary Policy Committee (MPC) will hold and rate hikes have ended.<\/p>\n

BofA has historically been one of the more hawkish institutes when it comes to South Africa\u2019s policy rates, being an outlier warning that the Reserve Bank could push interest rates higher by another 25 basis points in its final meeting for the year.<\/p>\n

This has been premised on the fact that inflation is still a risk in the country, given the near-term pressures of higher fuel prices (in September and October), higher global interest rates and other challenges like the avian flu outbreak and inclement weather.<\/p>\n

More recently, a spike in global oil prices in October also added weight to the view that inflation pressure is going to be sticking around.<\/p>\n

However, the finance group has now changed its tune, saying these risks will likely not follow through to the extent previously forecast.<\/p>\n

\u201cWe are reversing our call for a SARB hike at the November 23 meeting. New risks \u2013 particularly oil prices \u2013 have pulled back the 20% spike from late August into early October. Year-end inflation of 5% and a policy rate of 8.25% is more than a 3% positive real rate \u2013 enough for SARB to remain on hold, in our view,\u201d it said.<\/p>\n

\u201cWe now expect the SARB to stay on hold at the November meeting and in 1H24. We think it\u2019s likely to keep rates higher for longer. We see the next move as a cut to the policy rate. We forecast cuts of a cumulative 50bp in 2024 starting in July and 75bp in 2025,\u201d the bank said.
\n
\nBofA noted that the previous two holds on the interest rate were accompanied by hawkish tones from the central bank.<\/p>\n

Easing inflation towards 5% will help the SARB to leave rates unchanged for the next few meetings in 2024.<\/p>\n

Inflation spiked up in September to 5.4% due to rising fuel and food prices, and is expected to rise again for October (BofA has pencilled in 5.7%) for the same reasons. However, this is expected to drop to 5.1% by the end of the year.<\/p>\n

With inflation looking to ease, a hold on rates is also supported by the US Fed\u2019s latest decision to hold, which Bank of America said is indicative of the US hike cycle also ending and cutting expected from mid-2024. One unknown remains, however, and that\u2019s the number of voters behind the SARB\u2019s next move.<\/p>\n

\u201cDeputy Governor Kuben Naidoo resigned in October, while his departure date is still to be confirmed, possibly leaving the MPC with just four members. They are likely to be cautious on hikes, especially if data is supportive of keeping rates unchanged.<\/p>\n

\u201cThe cutting cycle will depend on global interest rates and domestic inflation dynamics,\u201d the bank said. The SARB\u2019s MPC will meet next week and deliver its final interest rate decision for 2023 on 23 November.<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. Economists at the Bank of America have shifted their expectations for the South African Reserve Bank\u2019s next policy move, now falling in line with the wider expectations that the Monetary Policy Committee (MPC) will hold and rate hikes have ended. BofA has historically been one of the more hawkish institutes when it […]<\/p>\n","protected":false},"author":84,"featured_media":56648,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,275],"class_list":["post-56650","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nEconomists reverse interest rate expectations for South Africa - South Africa<\/title>\n<meta name=\"description\" content=\"Economists at the Bank of America have shifted their expectations for the South African Reserve Bank\u2019s next policy move, ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/economists-reverse-interest-rate-expectations-for-south-africa\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Economists reverse interest rate expectations for South Africa\" \/>\n<meta property=\"og:description\" content=\"Economists at the Bank of America have shifted their expectations for the South African Reserve Bank\u2019s next policy move, ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/economists-reverse-interest-rate-expectations-for-south-africa\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-11-16T16:53:21+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-16T17:03:44+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/11\/sm_1700141559.636982.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"683\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/economists-reverse-interest-rate-expectations-for-south-africa#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/economists-reverse-interest-rate-expectations-for-south-africa\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Economists reverse interest rate expectations for South Africa\",\"datePublished\":\"2023-11-16T16:53:21+00:00\",\"dateModified\":\"2023-11-16T17:03:44+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/economists-reverse-interest-rate-expectations-for-south-africa\"},\"wordCount\":517,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/economists-reverse-interest-rate-expectations-for-south-africa#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/11\/sm_1700141559.636982.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/economists-reverse-interest-rate-expectations-for-south-africa#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/economists-reverse-interest-rate-expectations-for-south-africa\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/economists-reverse-interest-rate-expectations-for-south-africa\",\"name\":\"Economists reverse interest rate expectations for South Africa - 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