As widely expected, South African Reserve Bank (Sarb) Governor Lesetja Kganyago announced a 25 basis-point hike in its benchmark repo rate on Wednesday.
This is the second increase this year, taking the rate to 7.25%, while the prime interest rate for commercial banks will increase to 10.75%.
It was a case of the Sarb’s Monetary Policy Committee (MPC) having little choice in the face of rising inflationary pressure from volatile oil prices amid the ongoing Middle East conflict.
ADVERTISEMENT
CONTINUE READING BELOW
Earlier on Wednesday, Stats SA reported that the Consumer Price Inflation (CPI) rate had increased to 4.4% in August, from 4.3% in July.
Read: Inflation picks up slightly ahead of rate decision
While this increase was lower than expected, the latest CPI reading is now 140 basis points above the Sarb’s new key inflation target of 3%.
#Sarb #ups #repo #rate