Rate hike would punish wrong people – economist
An independent economist says the Reserve Bank will be punishing the wrong people if it raises interest rates again.
The central bank's Monetary Policy Committee is meeting this week.
It's expected to announce its decision on Thursday.
The MPC surprised the market when it hiked the repo rate by 50 basis points in March to 7.75%.
Expectations are that it will be hiked by another 25 basis points this week.
READ: Numsa wants Scopa to probe SAA-Takatso deal
Economist Duma Gqubule feels for already financially-stretched consumers.
"I think this is a wrong move by the reserve bank to increase interest rates because Eskom has already done enough damage to the economy. So increasing interest rates is equivalent to a box and kicking an opponent who is on the floor."
Gqubule doesn't believe it's helping the economy.
"Our economy has never been in such a terrible situation since 1994 and I don’t see why the reserve bank is increasing interest rates again. It will not achieve any objectives of the reserve bank, it has now protected the currency and it will not reduce inflation because inflation is not caused by people spending too much."
