JOHANNESBURG – The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) meets on Thursday to decide on interest rates.

Economists forecast rates will drop by 0.25%, or 25 basis points, bringing the repo rate down to 7.75% from 8.25%.

The repo rate is the interest rate that determines how much the central bank lends to financial institutions.

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To maintain price stability in the economy, the SARB aims for inflation between 3% and 6%.

Economist Dale McKinley said that while everyone expects a big rate cut, he thinks the opposite will happen.

“The monetary policy committee has been so conservative in their handling of interest rates that they probably won’t cut it more than 25 basis points each time for the next maybe several months or into next year,” McKinley said.