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Economists express mixed views ahead of interest rate announcement

todayNovember 22, 2023 66

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As South Africans wait with bated breath for the Reserve Bank’s decision on interest rates on Thursday, economist Dawie Roodt has allayed the public’s fears, saying there’s a high likelihood of them remaining unchanged.

Roodt’s remarks come at the back of the CPI’s announcement of figures showing an increase in inflation.

According to Stats SA, the country’s annual consumer price inflation increased to 5.9% in October from 5.4% in September.

The CPI, which measures the monthly changes in prices for a range of consumer products, increased for a third consecutive month.

According to Chief Director for Price Statistics, Patrick Kelly, the following categories recorded annual inflation rates above 6.0% in October; coming in first was food and non-alcoholic beverages (8.7%); followed by transport (7.4%); health (6.4%); and restaurants and hotels (6.3%).

Roodt, however, says while high inflation normally affects interest rates – South Africans will most likely be in luck this time around.

However, another financial expert, Bonke Dumisa, thinks otherwise.

He believes that South Africans might have to tighten their belts, as he anticipates interest rates to be hiked due to the high inflation.

Dumisa says it is possible that the Monetary Policy Committee (MPC) could decide to raise the interest rates by either 25 or 50 basis points.

 

The figures come as South Africans count their last pennies and wait for the Black Friday specials, which officially kick in on Friday.

The Monetary Policy Committee (MPC) will announce its repo rate decision on Thursday afternoon after keeping it unchanged at 8.25% in September.

Written by: Nokwazi Qumbisa

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