rate hike?

[#1]

how will a rate hike of 50pnts affect our rand? taking into account that zim has unresolved issues...and could we expect banks to take a knock...any opinions?

[DCTrader]

Rand would strengthen as demand for Rands would increase because of rate differentials... Zim is another issue all together. MDC wins, Rand strengthens, Bob wins... it should see its ar**.

[#3]

so then could we see banks climb due to rate hike?

[DCTrader]

Mmmmm... no. I think the market is pricing in a 'no change' decision. A 50bps hike indicates that we're not done with the interest raising cycle and could spark a sell-off of banks. If no change then we could rally. It's a 50/50 call at the moment. I'd put my money on no change.

[shares]

Just to be difficult I'll call a 50 basis point increase (+0.5%). Based on consumer and producer inflation which are way above the upper end of the targeted inflation band. If you put your money in a money market account you barely get a real return. Most people will lose money through inflation if they don't spend it. Inflationary expectations are already influencing wage demands. The foreign currency influx to take advantage of higher rates would also help the Rand appreciate and contain imported inflation. It would also help maintain belief in the SARBs monetary policy of inflation targeting which is becoming harder to believe as inflation continues to tick up. On the other hand nobody likes interest rates to rise (politically unpopular) and this combined with concerns over the health of the economy (slowing growth rates) makes this an unpleasant choice. The fact that consumer spending is slowing is seen by many as a sign that further rate hikes are now unnecessary. If rates don't go up then they'll stay at this level for longer before they start to decrease. Inflationary pressures aren't go to evaporate too quickly on their own. It's not up to me though and the MPC and the central bank governor are the ones who will make the call.

[#6]

I'm short on banking sector. Interest Rate unchanged or increased means banks under pressure of further increase bad debt provisions. Man in the street can not afford interest cost, fuel costs and consumption inflation pressure on his monthly budget. Something has to give!

[barry_1]

i call a 25 points rates hike,also think shares have discounted a hike over the last couple of days,so not likely to fall in the event of such....how ever if we dont get a hike,shares might surge next week....either way there should be one more fairly strong run before the middle of May....there after it will be puts for me to preserve my capital....it happened last year as well,summer holiday time in America,less trading etc....not an old wives tale the saying "sell in May and go away " !

[ABuzz]

I think we're in for a 50 point hike. If they wanted to show they are serious about curbing inflation, they should do 100 points, but being financial boys, they probably err on the side of conservatism. I also think the 50 point hike is already factored in. We need the Zim results to really see Rand recovery (obviously not if Bob is back in power). As for banks, I think the general trend is up over the next 6 months or so, any rate adjustment will only cause a minor change which will recover in the short term.

[Wizard]

100 is out of the question. The Bank said in December it will only do 50 at a time