UBS houseview on SA rates
The question ahead of yesterday's MPC was a 100 or 75? The South African reserve bank tightened its belt and announced a 75-basis point hike. Thus, taking the repo rate to 6.25 per cent per annum to pre-Covid levels. Joining CNBC Africa for the MPC reaction is Tilmann Kolb, Emerging Markets Analysts, UBS Global Wealth Management.
Fri, 23 Sep 2022 11:05:21 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The SARB's decision to raise rates to 6.25 per cent signals a return to pre-Covid levels amidst a global trend of tightening monetary policy.
- Analysts like Tilmann Kolb emphasize the importance of controlling inflation in the long term and expect further rate hikes to combat rising inflation levels.
- Concerns about South Africa's growth outlook persist due to factors such as load shedding and weak external demand, despite moderate changes in the SARB's inflation and growth forecasts.
The South African Reserve Bank (SARB) has announced a 75-basis point hike, taking the repo rate to 6.25 per cent per annum, returning to pre-Covid levels. The move comes amidst a global environment where monetary policy is tightening, with many central banks adopting a hawkish stance in the fight against inflation. Tilmann Kolb, an Emerging Markets Analyst at UBS Global Wealth Management, joined CNBC Africa to provide insight on the Monetary Policy Committee's decision. Kolb highlighted the focus on bringing inflation back to the midpoint of the target range, emphasizing the importance of controlling inflation in the long term. He noted that while a 100-basis point hike at the next meeting is possible, a 75-basis point increase seems more likely given the current uncertainty both locally and globally. Kolb expressed concerns about South Africa's growth outlook, citing factors such as load shedding and weak external demand as potential challenges. Despite moderate changes in the SARB's inflation and growth outlook, he remains cautious about the economic landscape.
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