Will it hold or rise? SARB to announce interest rate decision this afternoon
Markets are betting on another interest rate hike this week, although easing inflation expectations and a contracting economy could give the Reserve Bank reason to hold.
South Africa's South African Reserve Bank is set to announce its interest rate decision on Wednesday afternoon, with market predictions pointing towards a potential 0.25% increase. Financial experts believe the decision will come into play amid rising oil prices and the recent Federal Reserve's rate hike, both contributing to inflation concerns.
Annabel Bishop, chief economist at Investec, suggests that a 25 basis point hike is highly likely, with the repo rate rising from 7% to 7.25% and prime lending rate moving from 10.5% to 10.75%. The Federal Reserve's move to increase its target range by 0.25% has heightened the chances of the SARB following suit, according to Bishop.
However, other economists remain cautious, with some anticipating a hold on rates despite signs of inflation stabilising. The MPC's decision is expected at 3pm, with the outcome uncertain given the mixed signals from inflation expectations.
Written by urgent.news from IOL's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
