Another cut in the repo rate of 100 basis points was expected on Thursday, Nedbank Group's economic unit said in response to Wednesday's inflation data.

Earlier, Statistics SA reported that consumer inflation for March slowed only slightly to an annual 8.5 percent from 8.6 percent the month before.

Headline Consumer Price Index inflation on a monthly basis came in at 1.3 percent in March, compared to 1.2 percent in the previous month.

"Despite the mildly negative numbers on the short-term inflation outlook, we still expect the SA Reserve Bank to look beyond the next few months' inflation figures and continue to focus on the medium-term inflation outlook as well as the rapidly deteriorating prognosis for the domestic economy," Nedbank said.

It added that the Monetary Policy Committee of the bank was thus likely to continue easing rates in the short term to try to offset some of the effects of the global recession on the domestic economy.

Not only would the repo rate be cut on Thursday, but this was likely to be followed by further cuts that would bring the prime rate to around 10 percent by September from the current 13 percent, Nedbank said.

Sapa

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