South Africans may benefit from additional interest rate cuts in 2024, following the Reserve Bank’s decision to lower the repo rate by 25 basis points to 7.75% on Thursday.
The latest cut reduces the prime lending rate to 11.25%, marking a cumulative 50-basis-point drop across the past two meetings of the Monetary Policy Committee (MPC). In September, the country saw its first rate reduction in four months.
Economists are optimistic about the economic boost these cuts could provide. Dawie Roodt, Chief Economist at the Efficient Group, anticipates further reductions next year.
"My expectation is for the Reserve Bank to cut by at least 75 basis points in 2024, possibly even a full 100 basis points. This could lead to significant economic growth," Roodt explained.
However, Roodt cautioned that external factors, such as volatility in the rand or an international crisis, could derail these optimistic projections.
As the Reserve Bank navigates balancing inflation control with economic growth, South Africans are hopeful that lower interest rates will alleviate financial pressure and stimulate the economy.