Standard Bank expects four interest rate cuts by the end of the year

Africa's largest lender, Standard Bank, is forecasting four rate cuts of 25 basis points each by the end of the year as inflation continues to ease towards the mid-point of the Reserve Bank's 3% to 6% target range.

This means the bank expects a repo rate of 7.25% by year-end, one percentage point below the current level of 8.25%. Standard Bank chief economist Goolam Ballim says this will most likely begin in the second quarter, implying cuts at each of the monetary policy announcements scheduled for 30 May, 18 July, 19 September and 21 November.

While Ballim said recent statements by US policymakers suggest the Federal Reserve will delay its rate-cutting cycle due to stronger than anticipated economic data, easing inflationary pressures may give local policymakers the space to begin cutting earlier.