# North-West University Business School economist, Raymond Parsons, says the South African Reserve Bank’s decision to raise the repo rate by 25-basis points to seven-percent is a precautionary move against future inflation. However, Parsons added that there is still limited evidence of stronger inflation expectations, and the timing of the hike is debatable given the weak growth outlook. He warns higher interest rates will increase borrowing costs for households and businesses in an already struggling economy.
Economist says Reserve Bank may be conflating first and second-round inflation effects