SARB expected to announce decision on interest rate

Reading Time: < 1 minute

South African Reserve Bank (SARB) Governor Lesetja Kganyago is expected to announce its decision on the interest rates on Thursday afternoon with many economists expecting a hike of half of a percentage point.

If the increase happens it could take the repo rate to 4.75 percent and would mean that the prime lending rate that banks charge customers would increase to 8.25 percent.

South Africans are facing mounting budget pressures as inflation moves further above the upper limit of 6 percent.

Stats SA on Wednesday announced that consumer inflation came in at a 13 year-high of 7.4 percent – which was higher than expected.

However, the SARB has been ahead of the United States and European central banks in hiking rates in a bid to dampen inflation.

Reasons for continuous rise in consumer inflation: