Kaya 959 Reporter
The South African Reserve Bank’s Monetary Policy Committee (MPC) is expected to announce an interest hike this week, analysts say.
The bank’s monetary policy committee is set to meet this Thursday and analysts are forecasting another 25 basis point hike of the repo rate, which affects the cost of borrowing.
This increase is expected to bring the repo rate to 4.25%.
Kaya Biz with Gugulethu Mfuphi spoke to Isaac Matshego, a Senior Economist at Nedbank who unpacked what this will mean for consumers.
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The threat of high inflation which is not good for any economy is what the MPC will be looking at, Matshego says.
“The normalisation of the global interest rate is very important, we have got to keep up with that. To help us have a positive yield that will help us attract funds to our markets, that will help finance the budget deficit,” says Matshego.
He also said that if the average oil price rises to $150 per barrel, South Africa’s consumer inflation could hit 7% year on year in May.
Matshego. says the interest rate will continue to increase toward the second half of next year.
He also urged consumers to tighten their belts to absorb the rising costs of living.
“With the rising interest rates, we will be starting to pay more on our debt, which will be eating into our purchasing power. As consumers, we really have to balance our finances,” he said.
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