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Brief note intended as a more regular interface with our clients. The emphasis is to provide our interpretation of important economic events, such as South African Reserve Bank interest rate statements, and key data releases, including GDP growth figures.
As expected, the SA Reserve Bank kept the repo rate unchanged at 12% following its August 14 rate meeting. In our view, the decision signals the end of the interest rate tightening cycle, which saw rates rise by a cumulative 500bps since June 2006. The BER expects that the next rate move could be down, starting in mid-2009. At this stage, interest rates are likely to be cut by 150bps in the second half of 2009.
