Pretoria- The Monetary Policy Committee (MPC) begins its two day meeting tomorrow to decide on whether to change interest rates or keep them as is, with experts predicting that the central bank will keep rates unchanged.
Currently, the repo rate stands at 6.5 percent.
Nedbank said the recent comments by Governor Gill Marcus and the weaker rand were likely to rule out a further reduction in the interest rates.
Last month the governor said that the scope for further easing of interest rates was limited and that the repurchase rate is likely to remain stable for some time.
"The domestic economic recovery remains fragile. We therefore expect the committee to leave the rates unchanged, but acknowledge that there is still downside risk over the next few meetings," Nedbank said in its weekly economic commentary.
Interest rates have been cut by 550 basis points since December 2008 in efforts to pull the country out of recession. South Africa came out of recession in the third quarter of 2009.
"Standard Bank expects a no-change decision from the MPC and anticipates the first interest rate hike in March next year," said the bank in its weekly economic commentary.
The MPC's decision will be made public on Thursday afternoon.
