SARB: Rate hike expectations exaggerated

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Gill Marcus Two Independent Newspapers Central bank govenor Gill Marcus. Photo: Mxolisi Madela.

Johannesburg - Expectations by South Africa's short term interest rate markets of up to 200 basis points in rates hikes this year are over-exagerated, Reserve Bank Governor Gill Marcus said on Monday.

Marcus also told Reuters in an interview that achieving real positive interest rates was not something the Reserve Bank would like to do, given weak domestic growth of below 3 percent, and that future rate decisions would be data-dependent.

The Reserve Bank increased its repo rate by 50 basis points to 5.5 percent last week, the first hike in about 6 years, to head off inflation pressures stemming from a weaker rand.

Marcus said the Reserve Bank had not taken the decision to increase rates lightly, and had taken into consideration the implications for growth and employment. - Reuters

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