Economist Jannie Rossouw is predicting an interest rate hike of 50 basis points this month.
The South African Reserve Bank’s Monetary Policy Committee will meet to discuss the country’s final rate hike decision for the year, with an announcement on the move expected this coming Thursday.
Interest rate hikes can slow down inflation by making the cost of borrowing more expensive. The current prime lending rate is sitting at 9.75 percent.
Wits Business School economist Jannie Rossouw says, “My expectation is that there will be a further increase in interest rates personally at this point and time. My expectation is 50 basis points or half a percentage.”
“Because inflation expectation remains high it is necessary for the Reserve Bank to act so we will see until such time as inflation expectation changes. Yes indeed consumers especially those with debt will feel the impact,” says Rossouw.
Unpacking SARB’s decision to increase the interest rate by 50 basis points: