<\/p>\n
As widely expected, South African Reserve Bank (Sarb) Governor Lesetja Kganyago announced a 25 basis-point hike in its benchmark repo rate on Wednesday.<\/p>\n
This is the second increase this year, taking the rate to 7.25%, while the prime interest rate of commercial banks will increase to 10.75%.<\/p>\n
It was a case of the Sarb\u2019s Monetary Policy Committee (MPC) having little choice in the face of rising inflationary pressure from volatile oil prices amid the ongoing Middle East conflict.<\/p>\n
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.<\/p>\n
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Read: Inflation picks up slightly ahead of rate decision<\/p>\n
While this CPI increase was lower than expected, the latest reading is now 140 basis points above the Sarb\u2019s new key inflation target of 3%.<\/p>\n
\u201cWe see upside risks to inflation,\u201d Kganyago said in his September MPC speech.<\/p>\n
\u201cAgainst this backdrop, the committee decided to raise the policy rate by 25 basis points, to 7.25%, effective from 25 September. The decision was unanimous,\u201d Kganyago added.<\/p>\n
\u201cA few months back, it seemed that the fuel-price shock might be unwinding, but now it has intensified. We are also seeing global rates moving higher,\u201d he noted.<\/p>\n
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\u201cWe have taken a measured approach to rate setting, in conditions of high uncertainty, but we remain focused on our price-stability mandate. It is crucial that inflation reverts to 3% as the current shock fades, and we take responsibility for delivering that outcome,\u201d he said.<\/p>\n
Read:
Fed raises rates, signals another hike as inflation persists
Steep diesel and petrol price projections for October
Markets can handle a hawkish Fed, not uncertainty<\/p>\n
#Sarb #ups #repo #rate<\/p>\n","protected":false},"excerpt":{"rendered":"
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