South African Economy - Essay Example

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South African Economy

4Governor Tito Mboweni signaled repeatedly in the past month that lending rates were set to rise again as underlying inflation become "more generalized", while stricter lending rules had so far failed to dent robust consumer spending and credit demand. 5 For the current business cycle, however, the hikes that were made to the country's interest rates recently are generally being considered to be the last.
The causes of high inflation in South Africa primarily are two external causes; "The current price drivers are rising oil and international food prices, simply because demand outstrips supply in the international market for these products. ...
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The South African central bank governor, Tito Mboweni, has hiked the interest rates when inflation is already high "to tighten monetary policy in an effort to stem rising inflation". 1 Since the cost of petrol is unceasingly increasing, it is creating additional pressure on food prices and adding to the current domestic inflation and bringing corresponding changes to the exchange rate, though the governor claimed that they were primary but not the only factors for the trend…
Author : ondrickajustyn

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