Standard Chartered said today in an economic note that while the Central Bank is apparently considering cutting its repo rate (it's now at 1 per cent), that won't necessarily work to drive down interest rates in the broader economy:
The signals coming from policy makers so far are indicative of their awareness of the issues affecting the economy. It is, however, important to appreciate that it is the market interest rates in the economy (i.e. lending rates and deposit rates) that need to drop in order to stimulate the economy. If we only see policy and interbank rates softening without those leading to lower market interest rates the benefits to the economy will be limited.
