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Close call expected for this week's rate decision

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South African Reserve Bank Governor Lesetja Kganyago.
South African Reserve Bank Governor Lesetja Kganyago.
Gallo Images/Business Day/Freddy Mavunda

The SA Reserve Bank's (SARB) Monetary Policy Committee (MPC) will meet this week, but the outcome of the rate decision is a tough one to call, with economists split on whether it will be held at 3.5% or if there is a slim chance for a 25 basis point cut.

The interest rate announcement will be made on Thursday, coinciding with the Bank of England's meeting, and it will follow the US Federal Reserve's decision on Wednesday, notes the Bureau of Economic Research (BER).

The BER expects the repo will be held at 3.5%, after the SARB had already slashed rates by 300 basis points so far this year in response to the economic impact of the Covid-19 pandemic.

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