Independent economist, Elise Kruger, says the Reserve Bank’s Monetary Policy Committee is likely to keep interest rates unchanged when it announces its decision this afternoon.
Inflation has ticked up slightly to reach 4.8% last month. However, it remains within the bank’s 3-6% target range.
Kruger says the committee is expected to keep rates at 8.25%.
She, however, says it will closely monitor inflation which is expected to increase over the next few months due to rising fuel prices.
“As we sit here, we already had a hectic fuel price increase at the beginning of September, and there will be another hectic increase at the beginning of October, and that will turn this very positive scenario around. I think that there will be some committee members concerned about the current scenario on fuel prices. So, it’s not impossible to have one or two committee members voting for a 25-basis point hike. But I firmly believe that the consensus of the committee will be a no change in terms of interest rates remaining at the current level.”
The Reserve Bank’s decision on interest rates is eagerly awaited by businesses and investors as it has significant implications for the country’s economic outlook.
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