Question

1. What do you think will happen with interest rates in the coming years? Do you expect them to continue to rise, and what economic conditions might influence these changes?

Answer 1

In the coming years, we expect that the economic expansion would continue. This would result in increased demand for goods and services and this would inturn result in increased inflation. As a result, to ensure positive real returns, the nominal interest rates might increase to facilitate this. Thus going forwards, the interest rates on loan and deposits are expected to increase as a result of the policy rate being increased. This would happen due to the increase in inflation as a result of robust economic conditions expected in the future.