Economists are expecting the South African Reserve Bank (SARB) to increase interest rates by 25 basis points at its Monetary Policy Committee meeting on Thursday.
They believe this could be the last of the interest rate hike cycle, which started in November 2021.
Economist Frank Blackmore says: “The probability is certain that we will have another increase of 25 basis points. The reason for that was the inflation at 7% in February remains well above the midpoint of the target range of 4.5%. It is not coming down. But we do, on a positive side, expect this to be close to the last of the increases and it is possible we have an interest rate decrease by year-end.”
The audio below is reporting more on the story:
Meanwhile, Chief Economist at Investec, Annabel Bishop says, “The South African Reserve bank will hike interest rates by 25 basis points tomorrow (Thursday), we think this might be the end of the interest rate cycle or certainly near the end, we have obviously seen the inflation rate come down from its peak of 7.8% last year.”
She adds: “It’s still high at 7%, but is expected to fall over in the second half of next year and average four and a half percent. The Reserve Bank targets inflation on a forward-looking basis, which means it’s targeting inflation 2 or 3 years out and with expectations that inflation will be within target, that would support a slowdown in the interest rate cycle and cessation in the second half of this year.”
Slight increase in take-home pay
According to the latest Take Home Index from BankServAfrica, which measures salaries paid into bank accounts, many employed South Africans saw a slight increase in their take-home pay in February.
The average nominal take-home pay rose to R15 186 during the month.
However, the increases in salaries are still way below to counter the effects of rising consumer inflation.
BankservAfrica is a payments partner and Financial Markets Infrastructure to the financial services industry.
Its index recorded a slight improvement in February take-home salaries paid.
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