Thursday, July 21, 2011

Inflation not expected to lead to interest rate hike

By Khanyisa Tabata
21 July 2011

Most economists expect the Reserve Bank to keep the repo rate steady at five-point-five-percent today.

This is despite Statistics SA’s announcement yesterday that the Consumer Price index had risen to five-percent last month.

Experts say above-inflation wage settlements, electricity tariff hikes and higher food prices are likely to push inflation up even higher in the coming months.

The expectation is nevertheless that the Monetary Policy Committee will try to support economic recovery with its rates announcement this afternoon.

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