International pressures point to rising interest rates in SA
Interest rates are rising in advanced economies, global financing conditions are tightening and international trade tensions have caused further volatility
The luxury of lower interest rates may be drawing to a close soon for South African consumers after one of the Reserve Bank's deputy governors, Francois Groepe, hinted at interest rate hikes on Friday. External pressures are heightening for the Bank and other emerging-market central bankers. Interest rates are rising in advanced economies, global financing conditions are tightening and international trade tensions have caused further volatility in global financial markets. Historically, hikes in the US interest rate cycle have raised growth and financial stability risks for emerging markets as capital outflows intensified. Emerging markets were experiencing currency weakness and higher inflation, and SA was no exception, Groepe told delegates at the UBS conference in Cape Town. SA faced two key external risks over coming months. He said the first was a possible sharp and sustained drop in capital inflows, as US interest rates increase. The second was a further substantial rise in th...
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