Interest rate hikes on the cards

Published May 27, 2015

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THERE was a high likelihood that the Reserve Bank would increase interest rates at its next few meetings, one of its deputy governors said yesterday. The central bank left interest rates unchanged as expected on Thursday but signalled that rising oil prices, above-inflation wage settlements and a weaker rand could stoke inflation and bring a rate rise in coming months. “(There’s a) high likelihood of us hiking interest rates in the next few meetings,” deputy governor Kuben Naidoo said, after the bank released its annual bank supervision report. The Reserve Bank has kept its benchmark repo rate steady at 5.75 percent since July as Africa’s most advanced economy struggles with power shortages, with Eskom unable to cope with demand. Naidoo said the central bank was conducting a review on foreign exchange trading, days after the competition watchdog accused several banks of price-rigging in currency markets, but had so far “not found anything untoward”. – Bloomberg

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