Economists are expecting the South African Reserve Bank (SARB) to increase interest rates by 25 basis points at its Monetary Policy Committee meeting on Thursday.
Economist Frank Blackmore says: “The probability is certain that we will have another increase of 25 basis points. The reason for that was the inflation at 7% in February remains well above the midpoint of the target range of 4.5%. It is not coming down. But we do, on a positive side, expect this to be close to the last of the increases and it is possible we have an interest rate decrease by year-end.
She adds: “It’s still high at 7%, but is expected to fall over in the second half of next year and average four and a half percent. The Reserve Bank targets inflation on a forward-looking basis, which means it’s targeting inflation 2 or 3 years out and with expectations that inflation will be within target, that would support a slowdown in the interest rate cycle and cessation in the second half of this year.
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