The Reserve Bank of South Africa’s Monetary Policy Committee (MPC) again raised the repo rate by 50 basis points.
The move, announced by SARB Governor Lesetja Kganyago on Thursday following an MPC meeting on Wednesday, will see the repo rate increase to 4.7% per annum. The increase is effective from May 20, 2022.
Speaking to the media on Thursday, the Governor said four MPC members preferred the announced increase and one member preferred a 25 basis point hike in the repo rate.
This is the third consecutive increase after a two basis point increase of 25 basis points in November and January. At that time, the hike was the first in nearly three years following a series of repo rate cuts amid the COVID-19 pandemic.
The bank’s forecast for headline inflation for this year has been revised upwards to 5.9% (from 5.8%).
The governor said this was mainly due to rising food and fuel prices.
“While food prices will remain high, fuel price inflation is expected to ease in 2023, helping headline inflation to fall to 5.0%, despite slightly higher core inflation. of 4.7% is now expected in 2024,” he said.
He said: “The economy is expected to grow 1.7% in 2022, revised down from 2.0% at the time of the March meeting. This is due to a combination of short-term factors, including flooding in Kwa-Zulu Natal and continuing electricity supply constraints. – SAnews.gov.za
The repo rate rises to 4.75%
SourceThe repo rate rises to 4.75%