JOHANNESBURG - South African consumers are bracing for a possible interest rate hike.
Some economists predict that the Reserve Bank could deliver its biggest increase in four years.
While most still expect a 25-basis-point hike, rising inflation and ongoing tensions in the Middle East could influence a larger 50-basis-point move.
Inflation accelerated to 5 percent in June, its highest level in two years, strengthening the case for tighter monetary policy.
Reserve Bank Governor Lesetja Kganyago will make the MPC announcement at 3pm.
"We've seen inflation expectations deteriorate quite substantially," says Investec Chief Economist, Annabel Bishop.
"That's something the Reserve Bank watches quite closely. It gives an indication of what future inflation may well be, and of course the job of the Reserve Bank is to target inflation, to bring it back to the 3 percent point, and it does that by looking at inflation in a 6 to 18 month period.
"Of course we've also seen the oil price jump back up towards $95 a barrel, and let's not also forget as well yesterday's inflation print, which came out at 5 percent, the highest now in two years, and all of these factors point to a further interest rate hike," she said.
"As occurred at the last MPC meeting, the Reserve Bank is likely to also discuss whether to move by 25 or 50 basis points but we think today will deliver a 25 basis point lift."