This week, the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) will convene to issue a decision on interest rates on January 26.
And this is likely to herald more BAD news for indebted South Africans.
25 (93%) of the 27 economists, academics, and experts surveyed by Finder predict that another rate hike is imminent.
More over half of the panelists (59%) believe that the rate will be increased by 50 basis points, while one-third (33%) forecast an increase of 25 basis points.
The predicted increase in interest rates comes amid high inflationary conditions in South Africa, with the most recent CPI reading for December 2022 showing inflation at 7.2%. According to BusinessTech, while this is lower than the 7.4% recorded in November, it is still outside the SARB’s target range of 3% to 6%.
Lesetja Kganyago, the governor of the Reserve Bank, has made it abundantly apparent that the central bank will continue to use rate hikes as its primary tool to combat inflation, stating that rate hikes will continue as long as inflation stays elevated.
The majority of finance experts surveyed by Finder anticipate rate hikes for the first two meetings of the year, with the possibility of rate reduction in the second half of the year.
However, opinions are divided, with a sizeable portion predicting that the central bank will maintain rates for the majority of 2023.
The majority of Finder’s panelists anticipate that the repo rate will peak this year at 7.5%.
The current repo rate is 7%, while the prime lending rate is 10.5%.
»Further boost in interest rates is imminent. DURING THIS WEEK«