Rate cut next week!

[Lord Anubis]

1%

 

[JK8]

Only? I was expecting more.... But we not Eng are we!
Oh well if its true it will be good!

Maybe another 2 % next year... fingers crossed!

 

[sand_man]

Good stuff, we'll take it!!!

 

[semiautomatix]

Is that a statement or a guess?

 

[ToxicBunny]

It has to be a guess.....

I'd actually be surprised if we get a rate cut of anything near 1%...

 

[Lord Anubis]

Is that a statement or a guess?

A guess of course, but it is highly likely, because if the MPC takes into account the injection of cash into the economy that will come as a result, they may think that it is essential since it will save jobs and satisfy labour unions.

 

[scatlett]

Its 50/50. They will have concerns about the exchange rate.

I am trying to sell my house, so I hope it comes down 1%

 

[semiautomatix]

It has to be a guess.....

I'd actually be surprised if we get a rate cut of anything near 1%...

I meant Anubis' guess or a statement from financial gurus.

 

[PPC_SouthAfrica]

Can't wait for this to happen it will be some much easier on everyones pockets over December

 

[R13...]

WTF? Business Day thinks the MPC should not cut rates! Are they real?!

to quote...

WHEN you’re just starting to win the battle, it’s not the time to let up. Which is why the monetary policy committee must not cut rates now.

Read the rest here...

 

[ToxicBunny]

In some ways they're probably right...

 

[Pitbull]

It should stay the way it is

Give us a big cut once the markets settle

 

[BTTB]

WTF? Business Day thinks the MPC should not cut rates! Are they real?!

to quote...


Read the rest here...

Sorry, but I agree with them.

To drop interest rates now before the holiday season is not wise as we may be setting the Rand up to speculators over the quiet period in the markets and any hope of R6 a litre for petrol will be dashed out of the window.

Petrol is not the only concern. If the carry trade starts to move money out of our market too quickly this will also lend to the Rand becoming unstable. We could revisit R12, maybe R13 to the Dollar very quickly.

If it was me I would wait for the end of January when everyone comes back to work and see if the world has come back to its senses first and then see which way the wind is blowing. If it looks favourable then cut in February or wait for April. Reserve Bank could even drop by 2% in April next year to stimulate the market before it goes into winter mode.

A half a percentage point now in my opinion is a waste of time.

 

[KillerX]

well said BTTB. I agree with what youre saying, just as it seems inflationary pressure is starting to lessen, they want to cut rates. They should hold off on it for another 3 months i.m.o

 

[R13...]

yeah i agree there's a case for leaving rates as is, but surely the mpc is not likely to reduce rates by more that 0.5% at a time. so they shud give us the half now & the other half next quarter.
if they don't cut now then we have to wait a whole 1/4 b4 the mpc meets to deliberate again! and the petrol price is more likely to be influenced by opec than the rand at the moment.

 

[scatlett]

You guys seem to be forgetting that our growth has come to a standstill. iirc the growth percentage for Q3 was 0.2%. We are probably going to be in a negative growth situation for 2008Q4.

It seems nonsensical to keep interests high when the ship is heading for a recession. Surely the risk of rand volatility is a small price to pay to resist a recession which will negatively impact sentiment in the market and cause many many people to lose jobs.

At every mpc meeting there is a fine balance between controlling inflation expectations and encouraging growth. I wouldn't be able to make the call. I feel sorry for those mpc members for having to make the call. If they get it wrong, they could be ruining peoples lives.

 

[Lord Anubis]

You guys seem to be forgetting that our growth has come to a standstill. iirc the growth percentage for Q3 was 0.2%. We are probably going to be in a negative growth situation for 2008Q4.

It seems nonsensical to keep interests high when the ship is heading for a recession. Surely the risk of rand volatility is a small price to pay to resist a recession which will negatively impact sentiment in the market and cause many many people to lose jobs.

At every mpc meeting there is a fine balance between controlling inflation expectations and encouraging growth. I wouldn't be able to make the call. I feel sorry for those mpc members for having to make the call. If they get it wrong, they could be ruining peoples lives.

And that is exactly why 1% is vital now. The cash injection may save jobs. With oil testing $30, I would be surprised if pump price didn't see R6 as well. I also think that the JSE will rebound if there is a strong message from the MPC that we are in an upswing. Stock will be traded and we may even see R9/$ soon. If rates stay as they are we are doomed. Investors will stay away and rather buy sterling as it may seem more attractive than a stuck Rand.

 

[Lord Anubis]

Todays the big day!

 

[TheShogun]

I hope the rate remains unchanged until the next time it's reviewed.
If it drops at this time of the year, I think too many people will allow it to cloud their judgement and then overspend as a result.

 

[Gadget Man]

Let's hold thumbs ... a 1% would do the retail sector some good. It may be too late though for this "shopping season". Lots of retailers are feeling the pinch. Most can't last too much longer and we'll see the effect in a few months time.

Let's all hope.