As inflation climbs, there are fears Sarb may be forced to hike repo rate

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As inflation climbs, there are fears Sarb may be forced to hike repo rate

South Africa has been tracking global inflationary pressures and this country is not unique in seeing prices rise.

South African Reserve Bank (Sarb) Governor Lesetja Kganyago. Picture: @SAReserveBank/Twitter
  • South African Reserve Bank
  • Repo rate
  • Inflation
  • Rising cost of living
  • Consumer price inflation

JOHANNESBURG – There are now fears that the South African Reserve Bank (Sarb) will be left with no choice but to continue hiking the repo rate as inflation climbs.

Stats SA announced on Wednesday that annual consumer price inflation had been recorded at 7.4% for June from 6.5% the month before.

South Africa has been tracking global inflationary pressures and this country is not unique in seeing prices rise.

The reserve bank’s MPC is set to pronounce on the repo rate on Thursday afternoon.

Protests here at home and in countries such as the UK show that high fuel prices are a global problem.

This has led to rising inflation, with central banks, including the US Fed, left with no choice but to hike rates.

Nedbank economist Isaac Matshego said that more increases were on the cards for South Africa.

“We still anticipate further hikes at the September and November meetings this year,” Matshego said.

The reserve bank uses the repo rate to fight inflation, which is now at its highest level in 13 years.

Those with debt will now need to re-examine their budgets to see if it is still possible to get through the month.

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