'High likelihood' of rate hikes

Johannesburg - There's a high likelihood that the SA Reserve Bank (Sarb) will increase interest rates at its next few meetings, one of its deputy governors said on Tuesday.

The Sarb left interest rates unchanged as expected last Thursday, but signalled that rising oil prices, above inflation wage settlements and a weaker rand could stoke inflation and bring a rate increase in coming months.

"(There's a) high likelihood of us hiking interest rates in the next few meetings," deputy governor Kuben Naidoo told reporters on Tuesday, after the Sarb released its annual bank supervision report.

The Sarb has kept its benchmark repo rate steady at 5.75% since July last year as the SA economy struggles with power shortages, due to Eskom being unable to cope with demand.

Naidoo said Sarb was conducting a review on foreign exchange trading, days after the competition watchdog accused several banks of price-rigging in currency markets, but had so far "not found anything untoward".

South Africa is investigating several global banks for allegedly fixing foreign exchange trades.