With a looming rate hike and a currency that is not showing any signs of strengthening any time soon, South Africans are in for a difficult time.<\/p>\n
Speaking to CNBC Africa<\/a>, Lesiba Mothata, chief economist at Investment Solutions said that the South African Reserve Bank (SARB) will likely hike rates by 50 basis points\u00a0at the end of\u00a0January, following a steep crash in the rand over the past week.<\/p>\n This will have a significant impact on South African consumers, particularly those with outstanding debt.<\/p>\n The hike in rates would primarily be to contain inflation, which has been uncomfortably close to the 6% barrier for the past\u00a0quarter.<\/p>\n Mothata noted that for the first time since 1956, South Africa is seeing more money leaving the country than entering it.<\/p>\n “South Africans are taking money out of the country,” Mothata told CNBC Africa.<\/p>\n “That is ominous…when you look at countries that eventually had a current account crisis…these were similar outcomes.”<\/p>\n Ultimately, the current economic climate spells bad news for consumers. “You’re going to have to tighten your belts,” Mothata said.<\/p>\n With the rand tanking, and a hike rate looming, here’s how consumers, businesses and the entire country will be affected:<\/p>\n It’s not all bad news, however, as Mothata believes that the current global oil prices, which are pushing to dip below $30 a barrel, serve as somewhat of a silver lining, which will give the country a little bit of breathing room.<\/p>\n “It will help the inflation situation. We remain a miracle country…sometimes things just come and help us, and this is one,” he said.<\/p>\n R20 to the US dollar is on the cards<\/a><\/strong><\/p>\n Rand touches R16 vs dollar<\/a><\/strong><\/p>\n Weak rand not Zuma\u2019s fault \u2013 ANCYL<\/a><\/strong><\/p>\n\n
More on the rand<\/h3>\n