Reserve Bank forecast to increase key rate by 25 bps to 4.00% on January 27

SA's inflation remains reasonably benign given the persistently weak economy, but prices are edging higher and the SARB's interest rate normalisation process will continue, says Standard Bank economist Elna Moolman. Picture: SUPPLIED

Eighteen of 23 economists polled from January 12-18 said the Bank would add 25 basis points to the repo rate next week, taking it to 4.00%, while five said it would leave rates on hold. “SA’s inflation remains reasonably benign given the persistently weak economy, but inflation is edging higher and the SARB’s interest rate normalisation process will continue,” Moolman added.onsumer price inflation, as measured by its consumer price index , rose to 5.9% in December, its biggest annual increase since March 2017 when the rate was 6.1%. Prices rose 0.6% month on month.

All five economists who expect the Bank to pause on January 27 predicted rates to rise in March. It last hiked rates in November to 3.75%.

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