![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/12\/image-60.png\")
<\/a>Interest rate relief <\/strong><\/p>\n\n\n\n Amidst the cuts in inflation, the BER said that further interest rate cuts remain on the cards for South Africa – for now. <\/p>\n\n\n\n That said, the SARB is unlikely to cut rates by more than 25 basis points at a time. <\/p>\n\n\n\n In financial markets, forward-rate agreements point to a total of 75 basis point cuts over the next 12 months. <\/p>\n\n\n\n This would bring the repo rate to 7.0% the prime rate and the prime lending rate to 10.5%. <\/p>\n\n\n\n Although this is in line with the SARB’s forecast, if the SARB diverts, a total of just 50 basis points seems more likely than 100 basis points, despite the recent positive data. <\/p>\n\n\n\n The SARB has repeatedly noted that it makes interest rate decisions on the future moves of inflation. <\/p>\n\n\n\n Although cuts are expected, the Nedbank Group Economic Unit warned that inflation is expected to increase in 2025 amid higher food and fuel prices. <\/p>\n\n\n\n \u201cFood inflation will rise off a low base, further amplified by the impact of the earlier dry weather. Global disinflation will also slow down,\u201d said Nedbank.<\/p>\n\n\n\n \u201cHowever, improved domestic operating conditions due to stable electricity supply and further efficiency gains in logistics should help contain input costs and operating expenses, which, together with the Nedbank added oil prices are also set to rise slightly as global demand improves and OPEC extends production, while ongoing conflicts in the Middle East continue to threaten oil prices.<\/p>\n\n\n\n “Meanwhile, the stronger US dollar will likely weigh on the rand and other emerging market currencies,” said Nedbank. <\/p>\n\n\n\n “The dollar will benefit from the expected change in US economic policies under Donald Trump’s administration, which could lead to sticky global inflation and raise the floor on interest rate cuts.”<\/p>\n\n\n\n “On the domestic front, the threat of electricity tariffs and other administered prices rising more than expected and wages outpacing productivity could also exert pressure. We forecast PPI to average around 4% in 2025.” <\/p>\n\n\n\n
predictions of higher rainfall will partly mitigate the upside.\u201d<\/p>\n\n\n\n
\n\n\n\n