SARB deputy governor Rashad Cassim admitted in an interview with Reuters on May 3 that rate hikes are unpopular in the current low-growth economy, But said the top priority was managing inflation expectations. The annual consumer price inflation rate exceeded 7%, which was higher than the central bank’s target range of 3%-6%.
“We want to make sure depreciating exchange rates and (high) food prices don’t trickle down to the rest of the inflation basket,” Card Sim said.
“If we do nothing, (consumers) income will go down are increasingly eroded. So a little initial pain may benefit consumers in the medium to long term.”