Economists disagree on whether the South African Reserve Bank (SARB) will raise the repo rate again when its Monetary Policy Committee announces its next decision on 19 November.
Nedbank expects a 25 basis point increase, even after Finance Minister Enoch Godongwana announced R10 billion in fuel levy relief, according to published reports of its latest outlook. Other economists say the case for a further hike is weaker.
The case for a hike
Nedbank said: "we expect the Monetary Policy Committee to raise interest rates by 25 basis points at its November meeting." It added that the inflation outlook "remains uncertain". The bank now expects inflation to peak at 5.7% in October, down from a previously expected 6.4% in November before the fuel relief.
The reports put the repo rate at 7.25% and the prime rate at 10.75%, after a 25 basis point increase announced on 23 September and effective on 25 September. SARB Governor Lesetja Kganyago has said inflation faces upside risks.
Godongwana's fuel levy relief takes R1.50 a litre off petrol and R3 a litre off diesel from 4 November to 1 December, then R1 on petrol and R1.50 on diesel until 5 January 2027, at a fiscal cost of R10 billion.
The case against
Investec chief economist Annabel Bishop said market signals point away from a hike, and that pressure on the rand is expected.
Old Mutual Wealth investment strategist Izak Odendaal said further hikes are "probably unnecessary and unlikely". He expects inflation of between 4.5% and 5% in the coming months, and said that by April 2027 high fuel prices will be in the base.
What we do not yet know
September consumer inflation is reported as 4.5% in one source and 4.7% in another; check the Stats SA release before using either. The repo rate level and the 19 November date come from a single report and need a second confirmation. These are economists' forecasts, not signals from the Reserve Bank, and the official November fuel price adjustment has not yet been announced.
