South Africa’s repo rate has been raised by 75 basis points to reach seven percent with effect from Friday, South African Reserve Bank governor Lesetja Kganyago has announced.
Kganyago said the bank’s Monetary Policy Committee (MPC) met on Wednesday and agreed to hike the repo rate by 75 basis points.
“The revised repurchase rate remains supportive of credit demand in the near term, while raising rates to levels more consistent with the current view of inflation and risks to it,” Kganyago said.
The level of the repurchase rate was now above the level prevailing before the start of the COVID-19 pandemic, the governor said.
According to him, this was the sixth consecutive increment following two 25 basis points hikes in November 2021 and January this year.
The rate was hiked by a further 50 basis points at the May meeting of the committee. In July and September, the MPC raised the rate by 75 basis point.
“The aim of policy is to anchor inflation expectations more firmly around the mid-point of the target band and to increase confidence of attaining the inflation target sustainably over time,” the central bank chief said.
The bank's forecast of headline inflation for 2022 and next year is slightly higher at 6.7 percent and 5.4 percent, respectively, he added.