Repo rate: The SARB cut interest rates by 25bp, bringing the repo rate down to 7.50% in January. However, previous rate cuts were by unanimous vote. This time, the vote was split, with four members favouring the cut while two voted for a hold. The reduction in the repo rate takes the policy stance to a more neutral level, removing some restrictiveness. Currently, the market has adopted the SARB’s cautious stance, with FRAs pricing in roughly one more 25bp cut by the end of the year. Of course, this could shift quickly depending on US economic data and what policies the US implements over the coming months.
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