Marcus to announce decision on repo rate

Tuesday, January 26, 2010

Pretoria - Reserve Bank Governor Gill Marcus will later today announce the Monetary Policy Committee's (MPC) decision on the repo rate.

The repo rate, which currently stands at 7 percent, has been left unchanged since September last year.

Economists predict that Marcus will leave the rate unchanged when she makes the announcement at 3pm today.

Standard Bank said though the country was technically out of a recession, the economy remains vulnerable with households not keen on accumulating new debt as well as increased unemployment still posing problems.

The Bank said these concerns raise the prospects for a cut in the repo rate. However, further monetary policy relaxation will not translate into employment growth or stimulate private sector activity.

Nedbank economist Carmen Altenkirch said: "We are expecting them to keep it unchanged at this meeting and for the rest of the year with a hike expected in early 2011".