Scene set for rates to be slashed

EtienneK said:
They are predicting a 100 point drop. Well, that's what some guy from ABSA said yesterday on the news.
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That can't be true... remybfg10k just said it won't be more than a 50 point drop. He obviously knows what he's talking about, otherwise he wouldn't say something like that? ;)

Anyways... even a 50 point drop is fine. For a lot of us that means a R500 save every month. Combined with the previous one we just had, it's already R1000 I'm saving per month. They also predict more cuts coming this year.

Happy times! :)
 
Retro said:
That can't be true... remybfg10k just said it won't be more than a 50 point drop. He obviously knows what he's talking about, otherwise he wouldn't say something like that? ;)

Anyways... even a 50 point drop is fine. For a lot of us that means a R500 save every month. Combined with the previous one we just had, it's already R1000 I'm saving per month. They also predict more cuts coming this year.

Happy times! :)
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Or you could read the second half of the article :p
 
EtienneK said:
They are predicting a 100 point drop. Well, that's what some guy from ABSA said yesterday on the news.
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He predicted 100bp this meeting, 100bp the next and 50bp for the two thereafter. repo rate at 8% by year end.
 
From the same article :D

But not all economists agree that the Reserve Bank will act aggressively. Standard Bank economist Danelee van Dyk said the Reserve Bank would be cautious, given the "brewing risks in the currency market", and would cut by only 50 basis points at meetings this year.

This would be the case despite Van Dyk expecting the inflation rate to drop by three percentage points in January, when Statistics SA brings in a new basis of calculation.

ETM economist Russell Lamberti agreed with Van Dyk that the Reserve Bank would cut by only 50 basis points. "We would like to see the Bank err on the side of caution," he said
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milomak, it would be to great a risk to the economy to drop it by more than 50 basis points! Although even i would be very happy with a 100 basis points drop :D

A steady flow of 50 basis points drops this year would be the best!
 
http://www.reservebank.co.za/internet/Historicdata.nsf/Mainpage?OpenPage&Click=42256DA4002CFF0E.29d44b91ee5b4df442256d860053d613/$Body/0.DF0

Interesting
 
remybfg10k said:
milomak, it would be to great a risk to the economy to drop it by more than 50 basis points! Although even i would be very happy with a 100 basis points drop :D

A steady flow of 50 basis points drops this year would be the best!
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which risk? the currency? given the current state of the world economy carry is not what investors are looking for. 100bp will not impact the rand negatively at all. the market has all but priced in a 100bp cut.
 
milomak said:
which risk? the currency? given the current state of the world economy carry is not what investors are looking for. 100bp will not impact the rand negatively at all. the market has all but priced in a 100bp cut.
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the oil price is looking ominous.
going in the direction of $50/barrel at the moment! the rand isn't helping either having just been cited as the reason for the rise in petrol prices. and we know how that gets the retailers putting their prices up again.
 
Lord Anubis said:
It will be 100 bp! Why...because the ANC wants votes and Robweni and MPC kie want to keep their jobs...maybe even 150 bp!?!
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There are very strong cases to be made for both 100bp (growth) and 50bp (volatility in the rand). The above thinking though could definitely tilt this decision to 100bp...
 
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