Rising core inflation and a better-than-expected economic recovery could mean 50 basis points of cumulative hikes by the end of January 2022
BNP Paribas, one of the world’s largest banking groups with operations in more than 70 countries, has brought forward its interest rate expectations, saying the Reserve Bank should raise rates in late 2021 amid rising core inflation and an economic recovery.
BNP Paribas, however, cited rising core inflation and a better-than-expected economic recovery as reasons why the Bank could raise the repo rate 25 basis points in November, followed by a second hike in January 2022. Inflation data later on Wednesday is expected to show an acceleration to 4.3% year on year in April, which is still below the midpoint of the Bank’s 3%-6% target range.