Tito Mboweni took a massive gamble yesterday and raised the repo rate by only 50 basis points to 12,5 percent.
He had earlier threatened currency by raising rates 200 basis points.
The rand immediately tumbled, bonds plummeted, and no one expects the move to dampen inflation that is hovering around 12 percent.
Commercial banks immediately boosted their prime rate to 15,5 percent. And as sure as day follows night more businesses will go bankrupt, more South Africans will lose their jobs, more homeowners will lose their properties and everyone will feel the pinch.
The unions are already screaming blue murder.
But the Reserve Bank governor is in an impossible position. He must contain runaway inflation that could eventually make paupers of us all, yet whatever he does locally has no effect on imported inflation such as the cost of fuel, food and other goods from overseas
And Eskom is due for a monstrous rate hike that will filter through the economy and boost prices still further.
Let's hope the governor's gamble pays off. If it doesn't the rand will drop further and inflation will scream up.
We are in for tough times, folks, any way you look at it. Let us rather take the bitter medicine now than become another Zimbabwe.