South Africa's central bank warned on Thursday that interest rates may have to rise again to curb soaring consumption in the continent's biggest economy and said the rand is adjusting to a widening current account gap. The Reserve Bank has already raised its key repo rate by a full percentage point to 8% in two moves since June.
South Africa's gold and foreign exchange reserves edged up during July, but at a slow pace, showing that the country's central bank was inactive in currency markets while the rand remained volatile. Figures from the South African Reserve Bank showed that net reserves rose to ,447-billion at the end of July from ,185-billion at the end of June.
South Africa's Finance Minister Trevor Manuel is likely to tackle the thorny issue of whether the country's inflation targets should be adjusted when he unveils his three-year budget plans on Tuesday, analysts say.