Interest rates

Those South Africans in debt are set to face further pain in a fortnight with interest rates expected to be hiked. Photo by RODNAE Productions: on Pexels

Interest rate hike in a fortnight for suffering South Africans

Those South Africans in debt are set to face further pain in a fortnight with interest rates expected to be hiked.

Interest rates

Those South Africans in debt are set to face further pain in a fortnight with interest rates expected to be hiked. Photo by RODNAE Productions: on Pexels

Those South Africans in debt are set to face further pain in a fortnight with interest rates expected to be hiked.

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Experts are betting on a quarter-point (25 basis point) increase in the repurchase rate, with a chance of an even bigger 50-basis point move on Thursday, 25 May when the monetary policy committee gives its next decision.

Ouch!

Thanks to continued high inflation and a dramatic weakening of the rand in recent days and weeks, an rate increase is now a certainty rather than a possibility.

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Interest rates have been hiked 425 basis points since November 2021

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The central bank has delivered 425 basis points of tightening since November 2021, with March’s bigger-than-expected 50 basis-point move surprising financial markets.

The MPC believes it has taken the right decisions to guide price growth back to the midpoint of its target range, “but this cannot preclude further steps if inflation and inflation expectations continue to surprise higher,” Governor Lesetja Kganyago said recently.

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