No interest rate hike expected, say analysts
The Bank’s monetary policy committee has breathing space as the inflation average meets expectations
The Reserve Bank may refrain from raising interest rates to curb runaway inflation that rose more than expected in November, say economists. Inflation jumped to 6.8% in December, with market expectation ranging between 6.3% and 6.5%. Economists said the Bank’s monetary policy committee had breathing space to keep the repo rate unchanged, especially as the inflation average of 6.6% for the fourth quarter was in line with expectations. Late last year, the central bank indicated the end of the hiking cycle was near. Core inflation, which excludes petrol, energy and food, remained below the Bank target of 3%-6% and rose to 5.9% year on year from 5.7% in November. "As a result, I expect interest rates to remain on hold next week," said KPMG economist Christie Viljoen. Major contributors to the headline inflation rate was a rise in housing and utilities inflation — by 1.4 percentage points from 1.3 points previously — the hospitality sector and higher food prices, Viljoen said. Food and b...
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