Lower inflation, increasingly dovish sentiment of major central banks and stronger rand give impetus to callsAll the pieces of the puzzle have come together to build a case for the Reserve Bank to cut interest rates in July.
The Bank is under intense political scrutiny for its stance which is seen as too hawkish, with debate in the ANC and its alliance partners reignited over its mandate and the extent to which it takes economic growth and employment into account. The Bank's ability to keep inflation in check has meant that governor Lesetja Kganyago has come under further pressure to reduce interest rates, said PPS Investments portfolio manager Luigi Marinus.
The rand held steady at a two-week high against the dollar on Wednesday, only some 7c weaker from the Reserve Bank’s last policy meeting on May 23. The rand has firmed 4.1% against the dollar since June 7, when it reached its 2019 low of R15.17/$. Markets have been steadily pricing in interest-rate cuts by the US Federal Reserve, which has also helped boost local bonds to their strongest level in more than a year.
🙏🏿
Hope by 50 basis points.