South Africans will be holding their breath this week as they prepare for another possible interest rate hike.
In its last meeting of the year, the Reserve Bank’s Monetary Policy Committee (MPC) will make a decision on the interest rate on Thursday.
The MPC has kept the repo rate at 8.25% for the last two meetings.
Nedbank believes that the SARB will most likely hold the interest rate steady for a third consecutive time, reports IOL.
“Inflation edged slightly higher in September after sliding to a two-year low of 4.7% in July, with the upside stemming from fading base effects and higher fuel costs as oil prices spiked and the rand remained weak,” Nedbank said, adding that core inflation is trending in line with the SARB’s 4.5% target.
“Despite some upside risks to the outlook, the underlying environment has become more supportive of lower domestic inflation in the months ahead. Consequently, we expect no further rate hikes for this year, with the repo rate staying at 8.25% and the prime lending rate at 10.75%.”
The impact of an interest rate hike is perhaps most immediately felt on home loans.
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