Indebted South Africans could receive some financial relief on Thursday, with the South African Reserve Bank (SARB) expected to announce a possible interest rate cut. Economist Dawie Roodt believes the monetary policy committee is leaning toward reducing the repo rate by 25 basis points.
Roodt suggests that while this could be the last cut in the short term, it may not be the final reduction of the year.
"For now, I think another 25 basis points is pretty much guaranteed, with another likely to follow later, though not immediately," he said. "A third cut could be possible by the end of the year. Clearly, we are closer to a turning point in interest rates than we were two months ago."
If implemented, a rate cut would provide some relief to South Africans struggling with high debt burdens, as lower interest rates reduce borrowing costs.
US Federal Reserve Holds Rates Steady
Meanwhile, across the Atlantic, the US Federal Reserve opted to keep its key lending rate unchanged on Wednesday. This decision, the first since President Donald Trump returned to office, resists ongoing pressure from his administration to implement further rate cuts.
Policymakers voted unanimously to maintain the Fed’s benchmark interest rate within the range of 4.25% to 4.50%, signaling a cautious approach to monetary policy amid global economic uncertainty.
The SARB’s decision will be closely watched, as its policies influence inflation, consumer spending, and overall economic growth in South Africa.