Kaya 959 Reporter
According to experts at the Bureau for Economic Research, South Africa is likely to witness another interest rate hike next week, and it may be larger than previously expected (BER).
Kaya Biz with Gugulethu Mfuphi spoke to Hugo Pienaar who is a Chief Economics about what this means for South African consumers and how global interest rates are playing a part in the projected increase.
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“In the beginning of the year, it was exactly that, the reopening effects of commodity prices, especially oil that started to increase as a result we had some draughts in some parts of the world which pushed up agricultural commodity prices.”
“We also had these severe supply chain disruptions because of lingering lockdowns, all these culminated into driving global inflation,” says Pienaar.
In a research note published by the organisation on Monday the 9th of May, they predict an interest rate of about 50 bases points by the South African Reserve Bank (SARB).
“Against the global backdrop of more rapid policy normalisation and, importantly, the associated recent sharp weakening of the rand exchange rate, and the sustained upside risks to domestic inflation, we now expect the South African Reserve Bank (SARB) to hike the repo rate by 50bps next week,”
“This is a change from the previous view for a 25bps hike at the May policy meeting. The SARB’s decision is unlikely to be unanimous,” it said.
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