As the market anticipates a 75 basis point rates hike by the Reserve Bank this afternoon, Chief Economist at Efficient Group, Dawie Roodt says a one hundred basis point hike would deal with inflation once and for all.
His comments come as the Reserve Bank’s monetary policy committee prepares to make its rate announcement at 3pm this afternoon. In an effort to control inflation, the Reserve Bank has increased rates five times consecutively since November last year, taking the repurchase rate to 5.5%, and prime lending rate to 9%. Although inflation has shown signs of slowing down this week, it still remains well above the bank’s three to six percent target range.
[ON AIR]
The South African Reserve Bank’s Monetary Policy Committee (MPC) is expected to announce its decision on the interest rates later this afternoon. We speak to Firstsource Money Executive Director, Redge Nkosi.#MorningLive #SABCNews pic.twitter.com/Qo7IgA308n
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“In fact, if they decided to go for a full 100bps I would support that because we all know, central banks worldwide are tightening monetary policy, everybody is on tender hooks, everybody knows it’s going to happen and the financial market is just waiting for it to happen. I would like central banks to get it over with, if you go through hell, don’t crawl. So go for the big one, go for the 100 basis points increase for example, and really try to force inflation out of the system.”
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