South African Reserve Bank Governor Lesetja Kganyago has a hard task ahead of him as inflation hits 4%.
South Africans are again facing the prospect of higher borrowing costs as economists increasingly expect the South African Reserve Bank (SARB) to raise interest rates this week after inflation accelerated to 4% - the highest in 19 months.
The SARB’s Monetary Policy Committee (MPC) announces its latest interest rate decision on Thursday, with growing expectations that the central bank could increase the repo rate by 25 basis points in a move aimed at containing inflation risks linked to the Middle East conflict and higher oil prices.
If the SARB hikes by 25 basis points, the prime lending rate would rise from 10.25% to 10.50%. The fears come as many households are already struggling with rising living costs, weak economic growth and unemployment levels at almost 33%, officially.
Samuel Seeff from Seeff Property Group urged SARB not to raise rates, arguing that the recent inflation increase was largely caused by external factors rather than excessive consumer demand.
