South Africa's repo rate is expected to remain unchanged at 7.0 percent when the decision is made on Tuesday next week, according to a survey of leading economists by I-Net Bridge.

However, two of the nine economists hold out hope that a cut of 50 basis points could be in the offing when Gill Marcus makes her second decision as central bank Governor.

One economist in the survey feels this will be the first real opportunity for Marcus to show her hand.

The economists generally feel, however, that inflation is not yet convincingly back on target and there are now tentative signs of an economic recovery.

However, one of the economists not expecting a cut said further easing could not be ruled out totally.

The decision will be made shortly after 3pm on Tuesday 26 January.

Not bound by any political value

In her first public appearance as Governor on 17 November last year, Marcus, adopted a market-friendly stance, indicating she was not bound by any political value and that the Bank would not be targeting a particular rand level.

This flies in the face of calls by the left wing elements in government for lower rates, an end to inflation targeting and a need to weaken the rand to protect exports.

She said the Bank would, however, be quite willing to engage with interested parties on the inflation targeting debate.

She said there were pros and cons to a strong rand.

Refreshingly, Marcus decided to inject some of her own style into proceedings, and asked the entire MPC unit to enjoin the media during the announcement. She spoke fluently and openly about the main issues the MPC had grappled with. She said the unchanged decision was a unanimous one in the end.

Banks remain sound and profitable

She spent more time than normal on global issues as she said they impact the options SA has. She zoned in on the US, UK and China.

"The central bank does not intervene to achieve a level of what the exchange rate must be. There is no way we will intervene to target a particular exchange rate ? that is inappropriate," said Marcus.

She said that she was working on a process forward with the Minister of Finance, Pravin Gordhan, and what changing circumstances require for the economy. A tenuous relationship here is therefore not likely, which should be viewed as a positive.

Marcus also emphasized that local banks remain sound and profitable.

But she noted that there are significant risks, with global systemic risks of concern.

She also spoke about the immediate and second-round risks that may still ensue from Eskom price increases going forward (the MPC had factored in 25 percent).

But she felt CPI inflation would be around the upper 6 percent target in 2010, or even slightly within the band.