The South African Reserve Bank says there is still some room to raise the interest rates ahead of this month’s announcement.
The central bank raised the repo rate by 75 basis points to 6.25% at the monetary policy committee meeting in September.
The higher rates comes as the reserve bank tries to bring down inflation.
But consumers are feeling the pressure.
Reserve Bank Governor Lesetja Kganyago said that the central bank would continue to rely on interest rates to bring down inflation.
While the annual consumer price inflation slowed to 7.5% in September from the previous 7.6%, it still sits much higher than the target range.
The country’s inflation targeting framework looks to limit inflation between 3 and 6%.
Speaking at a public lecture at Wits University on Tuesday, Kganyago told delegates that the bank could not afford to lose control of inflation.
“There is going to be short-term pain in the form of the medication that is interest rates.”
While Kganyago admits consumers will feel the pinch, he added that policies remained favourable.
“Even with the adjustments in the policy rates, monetary policy remains accommodative.”
The central bank has raised interest rates six consecutive times at its last monetary policy committee meetings.
-EWN
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