A separate poll showed that 13 of 20 analysts predict the MPC will raise the key rate by half a point this week, with the rest expecting a bigger increase. Traders are fully pricing in a 50-basis-point lift, but see a chance of a bigger move.
“There’s a growing risk that the Reserve Bank might follow the boldness displayed by global central banks,” said Elize Kruger, an independent economist.
The decision will be announced during a virtual televised briefing that starts at 3pm in Pretoria. Kganyago will also give the voting breakdown and provide updates of the central bank’s economic forecasts, including for inflation, rates and economic growth.
The world’s central bankers are unleashing the most aggressive tightening of monetary policy in decades to cool off surging inflation. For SA, it creates the risk of eroding the differential that makes local assets attractive to foreign investors if the central bank doesn’t step up the pace of rate hikes.