Factors such as rapid policy normalisation and the associated recent sharp weakening of the rand-dollar exchange rate, as well as the sustained upside risks to domestic inflation, mean that the SA Reserve Bank is likely to increase the repo rate by 50 basis points this week.
Brace yourself - interest rates are definitely going up this week. However, economists seem divided about whether the Monetary Policy Committee (MPC) of the South African Reserve Bank (Sarb) will announce a 25 basis points (bps) or 50bps rate increase on Thursday.
According to the Bureau for Economic Research (BER), factors such as rapid policy normalisation and the associated recent sharp weakening of the rand-dollar exchange rate, as well as the sustained upside risks to domestic inflation mean that Sarb is likely to increase the repo rate by 50 basis points this week. This is substantiated by credit rating agency Moody's forecast that South Africa's interest rate will hit 8% in 2022, due to the inflation rate hovering on the upper end of Sarb's target band of 3%-6%.
An overwhelming majority (95%) of Finder's panel of 22 economists, academics and property specialists say the rate will and should increase - 62% think the rate...