What to expect from interest rates, and major blow to Trump’s tariffs plan

The South African rand remained steady on Wednesday, just one day before the central bank’s interest rate decision.

It was trading at 17.9375 against the U.S. dollar, showing little change from Tuesday’s closing level.

The US dollar was approximately 0.3% stronger against a basket of currencies as markets awaited the release of the minutes from the Federal Reserve’s latest policy meeting and upcoming economic data for clues about the US interest rate outlook.

The South African Reserve Bank (SARB) will announce its monetary policy decision today at around 13h00 on May 29.

On Thursday, 29 May, the rand was trading at R17.95 to the dollar, R24.13 to the pound and R20.19 to the euro. Oil was trading slightly lower at $65.77 a barrel.

Here are five other important things happening in and affecting South Africa today:

What to expect from interest rates: The majority of economists polled by Reuters and Bloomberg expect the bank to cut its main lending rate by 25 basis points. However, a significant minority, including local economists, think the rate could be left unchanged. [BusinessTech]

Tariffs ruled illegal: The US trade court ruled most of President Donald Trump’s global tariffs illegal, undermining a key part of his economic agenda. A three-judge panel at the US Court of International Trade unanimously sided with Democratic-led states and small businesses, stating that Trump wrongfully invoked an emergency law to justify his tariffs. [Bloomberg]

30% electricity price hike a reality: The Electricity Resellers Association of South Africa (ERASA) will determine a response this week to a looming 30% electricity tariff increase affecting end-users in Eskom areas. Recent bills show that a building in eastern Pretoria saw its costs rise from R357,921 to R464,081. Resellers must pass on these costs, despite users expecting only a 12.74% increase approved by Nersa. ERASA argues this average does not reflect larger increases for lower electricity users. [Moneyweb]

New lottery licence holder: After delays and court action, trade, industry and competition minister Parks Tau has announced Sizekhaya Holdings as the winner of the fourth national lottery licence. The winning consortium is reportedly led by KwaZulu-Natal businesspeople Moses Tembe and Sandile Zungu. Ithuba Holdings, which ran the lottery for the past 10 years, will see its operations come to an end on Saturday.[TimesLive]

Absa cuts growth forecast for SA: Absa has cut its forecast for South Africa’s real GDP growth in 2025 to 1.0%, down from 2.1% earlier this year, due to weaker economic momentum and global uncertainty. This revision was announced during a media roundtable on second-quarter perspectives and positions Absa at the lower end of recent economic forecast changes. [Business Day]