Reserve Bank rate hike was 'necessary'
Analysts say greater damage to economy likely had Bank stalled
The Reserve Bank risked greater damage to the economy had it not hiked interest rates. Even so, the central bank is expected to maintain a shallow and brief hiking cycle, economists said this week. The 25-basis-point hike in the repo rate to 6.75% announced on Thursday was widely expected, although economists were as divided as the Bank's monetary policy committee (MPC), which voted three in favour of the hike and three against. Bank governor, Lesetja Kganyago, said the final decision followed "robust debate". Elize Kruger, senior economist at NKC African Economics, said the rate hike may be a one-off event and that interest rates may remain unchanged at this level for some time. Kruger said the Bank's decision was considered a "risk management or buying insurance" approach against inflationary pressures. NKC's outlook for average headline inflation was 5.3% in 2019, which remains within the bank's 3%-6% inflation target range. 7.25% Forecast by Momentum Investments of where the rep...
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