The Reserve Bank’s interest rate hike this week of a quarter of a percent to 3.75% from an all-time low of 3.5% has angered many South Africans who feel their December has been ruined by higher interest costs.

To my surprise, some colleagues whom I expected to have better understanding of monetary policy said the decision was irrational. I have some sympathy for a ruined December but the decision was a matter of when, not if, and far from irrational...