Sarb Hikes Repo Rate to 7% as Iran War Bites and El Niño Looms
The central bank said four of six policymakers backed the increase as higher oil prices and inflation pressures lifted borrowing costs.
- On Thursday, The South African Reserve Bank hiked its key lending rate by 25 basis points, pushing the repo rate to 7.0% and the prime lending rate to 10.5%.
- Headline consumer inflation accelerated to 4.0% in April from 3.1% in March, driven largely by global energy price surges stemming from ongoing geopolitical instability in the Middle East.
- Higher interest rates increase debt servicing costs for consumers, with a homeowner holding a R2-million bond at prime seeing monthly repayments rise by roughly R335.
- SARB Governor Lesetja Kganyago confirmed that the Monetary Policy Committee voted four-to-two in favor of the hike, reflecting internal disagreement on the rate increase.
- Risks to inflation include potential Strait of Hormuz disruptions and an emerging El Niño, with headline inflation forecast to average 4.4% this year before easing to 3.7% next year.
10 Articles
10 Articles
South Africa hikes key interest rate as Iran war drives inflation
South Africa’s central bank raised its benchmark interest rate for the first time in three years, in effect blunting a $1 billion fuel relief package designed to soften the blow of surging oil prices. The move positions South Africa at the vanguard of a small group of emerging markets hiking rates to cushion the impact of the Iran war upending global supply chains.Policymakers voted 4-2 to lift the repo rate by 25 basis points to 7%, with Govern…
SARB raises interest rate, dealing blow to South Africans in debt
The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) elected to hike interest rates on Thursday. SARB’s MPC increased interest rates by 25 basis points. SARB Governor Lesetja Kganyago confirmed that four of the six-person MPC favoured a 25 basis point hike while two preferred no change. The repo rate thus rises to 7%, while the prime lending rate increases to 10.5% – placing additional pressure on households already struggling…
South Africa's central bank moves early to hike rates over Iran war
Reserve Bank raises repo rate by 25 basis points amid global shocks
South Africans will face higher borrowing costs after the South African Reserve Bank (SARB) increased the repo rate by 25 basis points, pushing it to 7% and lifting the prime lending rate to 10.5%, in response to persistent inflation pressures. Reserve Bank Governor Lesetja Kganyago said on Thursday that the environment had deteriorated since March, noting that households are being ‘squeezed’ as inflation risks rise. Inflation climbed from 3.1% …
Reserve Banks Mpc Expected To Hike Interest Rates By 25 Basis Points : The Africa
It is widely expected that the Reserve Banks Monetary Policy Committee (MPC) will increase interest rates by 25 basis points as it wraps its meeting on Thursday afternoon. This is a result of the Mi
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