Big chance for May rate hike, warns economist

Cape Town - There is a 35% probability of an interest rate hike in May - from around 15% before the SA Reserve Bank's Monetary Policy Committee meeting - and a 75% chance of a hike in July, according to Peter Attard Montalto, emerging markets expert at Nomura.

"We do not change our July hike baseline yet, however, and will watch the data. We attach a 35% probability to a May rate hike - from around 15% before the meeting - and maintain 75% for July," said Montalto in reaction to the Sarb decision on Thursday to keep the repo rate unchanged at 5.75%.

He pointed out that Nomura had expected no increase this time round.