South Africa
South Africa’s Reserve bank raised its benchmark repo rate by half a percentage point on Thursday saying the outlook for inflation had deteriorated.
This means the repo rate, which is the rate at which the Sarb lends money to banks, will rise to 6.75%.
The rand’s 15 percent plunge against the dollar since the last policy meeting in November forced the Reserve Bank to take more aggressive action after limiting its rate increases last year to 25 basis point moves.
A number of economists had urged the bank to take the bold step and raise interest rates by 50 basis points saying it would help the rand in the long run.
“Previously, the committee expressed concerns about the growing risks to the inflation outlook, mainly due to exchange rate and food price risks,” Governor Lesetja Kganyago told a news conference after the bank’s Monetary Policy Committee held its first meeting of the year.
“These risks appear to be materialising and have contributed to the significant deterioration of the inflation forecast,“added Kganyago
The bank’s decision comes hours after the country’s statistics office announced that the producer price inflation had risen to 4.8% year on year for December from 4.3% in November.
01:44
BRICS Film Festival begins in Moscow
01:08
SA poll body seeks clarification from Constitutional court on Zuma's eligibility
02:08
South Africa: Zuma's prosecution bid against Ramaphosa postponed
01:10
New poll finds support for South Africa's ruling ANC is plunging
00:53
Six arrested in connection with the murder of South African player Luke Fleurs
01:00
South Africa: Former president Jacob Zuma cleared to run in upcoming elections