MPC expected to hike repo rate

JOHANNESBURG - More bad news for consumers and borrowers.

Economists expect a 25 basis point hike in the interest rate this week.

The Monetary Policy Committee is meeting and an announcement is expected on Thursday.

But economist Dawie Roodt says there is a silver lining.

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"So we expect the Reserve Bank to increase interest rate by 25 basis points, but expect the Reserve Bank to increase interests rate by another 25 basis points in two months time or so, depending on what happens to inflation," he said.

"But then I think we would have reached the end of the cycle. From then on I expect inflation to gradually drift lower, and by the second half of this year, there is a good possibility that the Reserve Bank may decide to cut interest rates.

"So we are pretty close to the up turning point as far as inflation and interest rates are concerned."