Concerns that high inflation forecasts could force Sarb to hike interest rates

Governor Lesetja Kjganyago on Thursday announced a 25 basis points hike in the repo rate to 4%.

South African Reserve Bank (Sarb) Governor Lesetja Kganyago. Picture: @SAReserveBank/Twitter

CAPE TOWN - There are concerns that a high inflation forecast will leave the South African Reserve Bank with little choice but to hike interest rates.

Governor Lesetja Kjganyago on Thursday announced a 25 basis points hike in the repo rate to 4%.

Nedbank Economist Isaac Matshego said that the inflation outlook is worrying.

"Should inflation be stickier than currently expected, the Reserve Bank could be a lot more hawkish and hike for longer than we expect," Matshego said.