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Economists Divided Over Inflation Hike Impact on SARB’s Repo Rate Decision

Economists Divided Over Inflation Hike Impact on SARB's Repo Rate Decision
SARB is expected to announce the latest rates on Thursday following a series of meetings by the Monetary Policy Committee (MPC) during the week

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Economists are split on what the 5.9% increase in inflation means for the decision on the repo rate. The South African Reserve Bank’s (SARB) goal band of 3% to 6% for consumer price inflation (CPI) is approaching. The Central Bank prefers to anchor inflation at the midpoint, utilising monetary policy instruments such as the repo rate to keep inflation at bay.

Following a series of meetings by the Monetary Policy Committee (MPC) this week, the SARB will deliver the MPC Statement on Thursday, 23 November 2023. The CPI for October was higher than projected, reaching its highest level in five months, mostly due to food and transportation inflation. With inflation now on the upper limit of the central target range, economists warn it may still need to tighten its policy rates to slow inflation.

The repo rate sits at 8.25%, while the prime lending rate sits at 11.75%.

WATCH LIVE: Governor Kganyago Lesetja will deliver the MPC statement today at 15:00. The press conference will be live-streamed on Facebook https://bit.ly/3RJk6O0 & YouTube https://bit.ly/3Oh9JOG. Alternatively, watch on local news channels. #SARBMPCNOV23

“We expect the MPC to maintain a hawkish tone.”

Isaac Matshego, Nedbank economist

To read the full article, visit: ECONOMISTS SPLIT OVER INFLATION HIKE IMPACT ON SARB’S REPO RATE DECISION”.

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