Reserve Bank could leave rates unchanged
Economist says there is scope for the Reserve Bank to keep interest rates unchanged but the risk of further rate hikes this year remains
THERE is scope for the Reserve Bank to keep interest rates unchanged at the end of its monetary policy committee (MPC) meeting on Thursday‚ but the risk of further rate hikes this year remains‚ says Investec economist Kamilla Kaplan.Kaplan says inflation considerations coupled with weak economic growth will support an unchanged interest rate decision at this week’s meeting‚ but that there is a chance of a rate hike in November‚ possibly of 25 basis points.Consumer inflation data for August is scheduled to be released the day before the MPC announces it decision.According to Kaplan‚ CPI inflation is forecast to have moderated to 5.8% year on year (y/y) in August from 6.0% y/y in July."Aiding this moderation will be the substantial negative contributions‚ to both monthly and annual headline CPI‚ stemming from the petrol price component. Some of this effect on headline CPI is likely to be countered by ongoing upward food price pressure linked to the lagged effects of the drought‚" she ...
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