‘Consumers will be hit hard this year’

Experts say the Reserve Bank is in a difficult position and may have to increase interest rates soon.

Picture: Supplied.

JOHANNESBURG - South Africans have been warned that the Reserve Bank may have to increase interest rates at the end of the month.

The rand dropped to an all-time low against the dollar on Sunday night reaching R17,99 cents after erratic trading on Asian markets.

It recovered the next morning and is now sitting at around R16,60 cents to the dollar.

Experts believe it will take some time for the rand to recover and say consumers will be hard hit this year.

Nedbank's head of strategic research Mohammed Nalla says the Reserve Bank is in a difficult position.

"The Reserve Bank may have to shift stance from going in increment sizes of 25 basis points to 50 basis point at the January meeting. This will be to try and contain the inflation expectations so this will serve to exacerbate the downside growth to this economy."