Has the Reserve Bank moved too soon on rates?
There are good arguments for and against the Reserve Bank’s decision to hike rates earlier this month. Has the Bank moved too soon?
02 December 2021 - 05:00
Inflation in SA is relatively well contained, inflation expectations are well behaved, there is no evidence of second-round effects and growth is on the way down. So why did the Reserve Bank hikes rates at its November meeting? And was that a policy mistake?
Critics accuse the Bank of hurting the economy unnecessarily. They argue that because inflation is now driven by external factors, mainly involving fuel and food, it makes no sense to hike interest rates to dampen domestic demand in response, especially when the economy is still reeling from the pandemic...
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