Commenting on the decision today by the SARB’s Monetary Policy Committee (MPC) to raise the repo rate by another 50 basis points (bps), NWU Business School economist Prof Raymond Parsons says:

‘Contrary to the consensus view expressed by many economists that the repo rate would be raised by only 25 bps today, the MPC decided by a 3:2 vote to raise interest rates again by 50 bps. The MPC majority view sees the risks to inflation on the upside – shaped by both domestic and global factors. With the battle against inflation not yet seen as conclusively won, it was inevitable that the MPC would continue with its interest rate raising cycle for now. The extent of the increase in borrowing costs was nonetheless surprising given the crosscurrents and uncertainties that the MPC itself recognised in its statement.

 

Full Statement Attached

 

Issued by NWU Business School economist Prof Raymond Parsons