Two important decisions loom towards the end of November: whether the Reserve Bank will hike interest rates; and whether S&P Global Ratings will downgrade SA’s ratings outlook. These actions could put a damper on the country’s nascent economic recovery. Economists are not too concerned about S&P’s review on November 23. The ratings agency already has SA two notches into junk status on a "stable" outlook, which likely allows for the degree of fiscal slippage contained in the October medium-term budget policy statement. More concerning is the prospect of a rate hike at the next monetary policy committee (MPC) meeting on November 22. Nedbank chief economist Dennis Dykes thinks the committee will try to keep rates on hold for as long as possible given the absence of second-round effects from the rand’s depreciation. Other reasons for not hiking are the pullback in oil prices and the weak state of the SA consumer’s finances. "A hike now would hurt the economy and could help stifle the ve...

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