Economists Predict Stagnant Interest Rate

Written by on 20 May, 2021

By: Zilungile Mkhize

A number of economists in the country are predicting that the interest rates will be kept steady at 3.5 % when the South African Reserve Bank’s Monetary Policy Committee announces its decision this afternoon.

With the country’s economy under strain and hit hard by the effects of the COVID-19 pandemic, some economists believe that a cut of 50 basis points in the the interest rate would give room to households to spend more and companies to invest in the economy for better and faster recovery.

They say this is to support South Africa’s weak recovery.

It will also provide some relief to over-indebted consumers and stimulate business activities.

Meanwhile, rating agency Moody’s says sustained high-interest rates means that South Africa’s debt will continue to rise.

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