Interest rates in South Africa should be 200bps lower: economist.
Despite the pause in interest rate hikes, some economists believe the rate is still far too high – and are laying the blame on the five members of the South African Reserve Bank’s Monetary Policy Committee (MPC).
According to research economist at GIBS Business School, Dr Roelof Botha, the MPC has thus far followed a “ridiculous” trend of interest rate decisions based on what first-world countries are doing – far removed from the realities of South Africa.
This has led to a very restrictive interest rate hike cycle that has punished everyday South Africans harshly, while not having any impact on the true drivers of inflation, as intended.
Last week Thursday (20 July), The South African Reserve Bank’s (SARB’s) Monetary Policy Committee (MPC) voted to hold rates – keeping the repo rate at 8.25% and the prime lending rate at 11.75%.
The hold on rates signalled a pause in the SARB’s hike cycle that started in November 2021 – but it does not mean the end of the cycle.
