SARB likely to cut its policy rate by 25bps - TDS

In line with the consensus, analysts at TDS expect the SARB to cut its policy rate by 25bps to 6.5% at today's MPC meeting.

Key Quotes

“Since the January meeting things have definitely changed for the better as far as the MPC are concerned. With Ramaphosa now as president the political outlook has improved considerably. The budget, presented in February, put debt to GDP on a flatter trajectory compared to the MTBPS, and this was enough for South Africa to avoid a downgrade from Moody's. The hike in the VAT rate by 1ppt will boost inflation somewhat this year, but we think that the SARB will look through this. Indeed we expect the SARB to cut again by 25bps at the May meeting.”