Another reprieve for indebted consumers may be on the cards as economists are expecting the Reserve Bank to hold interest rates steady at its next monetary policy committee meeting this week.In May, the monetary policy committee paused an aggressive tightening cycle that started in January 2014 and resulted in a cumulative 200-basis-point increase, with interest rates rising six times over the past two-and-a-half years. The repo rate increased to 7% and the prime lending rate to 10.5%.A second postponement will help consumers weather rises in food prices, electricity, municipal rates and taxes. Bond repayments have jumped by more than R1,000 a month in certain bond categories since January 2014, a Standard Bank report on mortgage debt showed this week.The Reserve Bank expects inflation to average 6.7% this year and it is likely to resume tightening in coming months as it forecasts inflation returning to the 3%-6% target band only in 2018. In May, inflation slowed to 6.1% from 6.2% in April.story_article_left1Economists say a stronger rand boosted by investor demand for riskier, emerging-market assets, muted inflation but also anaemic economic growth and weak domestic demand would persuade the Reserve Bank to hold rates.Nedbank economist Busisiwe Radebe said this week the Reserve Bank was in a difficult position in determining rates during very low growth. But with a strengthening of the rand and the reduced likelihood of monetary tightening in the US, "We forecast that the bank will probably pause the hiking cycle this month. Our view is that the Reserve Bank will only raise rates by 25 basis points one more time this year, in September, but this will again be dependent on developments in the currency."FNB economist Mamello Matikinca said one more hike was possible. "The bank is definitely approaching the end of its tightening cycle ... We have 25 basis points pencilled in."The weaker global and domestic growth outlook, the possibility of turmoil in the build-up to the local elections next month and the threat of further downgrades to South Africa's credit rating, could weaken the rand.Shalin Bhagwan, head of fixed income at Ashburton Investments, said the recent rand strength against the dollar and pound as a result of Brexit and the potential of looser monetary policy in some large, global economies gave impetus for the Reserve Bank to hold rates, possibly until the end of this year.But further gains in the rand, which on Wednesday retreated from 10-week highs against the dollar on weaker South African growth concerns, were likely to be limited.Bhagwan said: "Any further rally in the rand will be strongly linked to the continued rally globally in risky assets. Central bank stimulus is likely to be relatively more bullish for our bond market than it is for the rand."A weaker rand can lead to interest rate hikes because it stokes inflation. Interest rates have averaged 12.9% over the past 18 years, according to data from Trading Economics.In June 1998, rates reached a crippling peak of 23.99%. Although consumers have not faced such high interest rates since, the rate hikes over the past two-and-a-half years have put pressure on homeowners.Higher rates have dampened demand for home finance and prompted banks to tighten lending requirements. A result of the hiking cycle in a period of slow economic growth is that banks require consumers to have larger deposits for home loans, according to Standard Bank Research's deposit index.South Africa's rising middle class is feeling the pinch. Michelle Beetar, MD of credit bureau Experian SA, said that since January 2014 the number of credit-defaulting consumers had risen by high single-digit percentages.story_article_right2The greater number of defaults was in the first half of the period between January 2014 and now. "The rate at which consumers are being impacted has slowed."Beetar said most of these people were defaulting on store cards and unsecured personal loans. This excluded microloans for less than R8,000 and with a term of less than six months.Consumers are also faced with other rising costs.Between 2014 and 2015, total property rates collected by municipalities increased by 11%. This is net of rebates for property rates and includes residential, commercial and state property, according to Statistics SA. Earlier this month, Johannesburg and Cape Town municipal rates and services rose by 6%.But clearly there are some who still have room to spend. Retail sales grew a surprising 4.5% year on year in May compared to a 1.9% year-on-year rise in April.But Stanlib chief economist Kevin Lings said concerns about the negative impact of a sharp upward move in inflation during the second half of this year, weak consumer confidence and an increase in electricity, water and fuel prices would "most likely slow retail spending, on a trend basis, during the remainder of 2016". Housing boost for public servants The Government Employees Pension Fund will invest R10.5-billion to help government employees and members of the public become homeowners.The GEPF has partnered with the Public Investment Corporation, SA Home Loans and the Government Employees Housing Scheme to assist more than 520,000 public servants who receive a housing allowance to become homeowners, said public service and administration director-general Mashwahle Diphofa.GEPF principal executive officer Abel Sithole said the scheme would cater for government employees in the R3,500-R15,000 income range, who did not qualify for bank-issued housing loans and housing subsidies.Of the R10.5-billion, R5-billion will go for extending affordable home loans to employees in the public sector; R2-billion will be channelled towards households that earn less than R20,000 a month; R2-billion will be allocated to loans for members of the public who qualify for a home loan; and R1.5-billion will fund affordable housing developers.The PIC has also committed R500-million to set up the Affordable Housing Development Company, which will assist with the development of affordable housing.- additional reporting by Dineo Tsamela..