Reserve Bank to announce rate decision, another hike looms
Governor of the South African Reserve Bank (SARB), Lesetja Kganyago, is set to announce changes to the repo rate on Thursday afternoon as the central bank continues with efforts to tame the country's high inflation.
Kganyago's decision comes after the Monetary Policy Committee met this week.
In March, the Reserve Bank tightened the noose around the necks of indebted South Africans by hiking the repo rate by another 50 basis points.
This moved the repo rate to 7.75%, while the prime lending rate increased to 11.25%.
The SARB has hiked its repo rate by 425 basis points over the past 18 months, tracking moves by major central banks in efforts to stabilize inflation.
Over a week ago, the rand crashed against the dollar after the US Ambassador to South Africa, Reuben Brigety, accused South Africa of supplying Russia with weapons.
The rate announcement comes a day after Statistics South Africa data showed consumer inflation easing to an 11-month low.
Headline consumer inflation slowed to 6,8% in April from 7,1% in March.
However, economists warn that the Reserve Bank is likely to raise the interest rates again, despite the overall drop in inflation.
Most economists expect a 25 basis point hike.
Economists also believe the central bank is nearing the end of the rate hiking cycle.
Earlier this month, Kganyago warned that the country's ongoing energy crisis and the recent greylisting by the Financial Action Task Force has kept investors wary of putting their money in the country.
This has worsened the country's already struggling economy.
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