4 likely scenarios for interest rates in the time of Omicron
The appearance of the Omicron variant of SARS-CoV-2, the virus that causes Covid-19, has thrown a spanner in the works of South Africa’s central bank, adding to the uncertainly that usually comes with the start of the new year, writes Alexander Forbes Chief Economist Isaah Mhlanga.
He says there are four likely scenarios for central bank policy.
The Money Show’s Bruce Whitfield interviewed Mhlanga (scroll up to listen).
If we have severe infections and hospitalisations… it might mean the Reserve Bank is becoming too aggressive… It might help to wait a bit [before hiking rates] … It might also cause a change in the US interest rate path…Isaah Mhlanga, Chief Economist - Alexander Forbes
Central Bank policymaking is difficult. It’s always easy for us… but it’s very difficult… especially in the current environment… [but] They should’ve waited, and not hiked in November…Isaah Mhlanga, Chief Economist - Alexander Forbes
This economy is not pumping enough to drive inflation up.Isaah Mhlanga, Chief Economist - Alexander Forbes
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