South Africa’s central bank hikes repo rate to 5.5%

South Africa’s central bank raised its benchmark interest rate by 75 basis points to 5.5 percent on Thursday — the steepest hike in a decade. The South African Reserve Bank’s Monetary Policy Commitee announced Thursday its members have agreed on an  " increase to the repurchase rate by 75 basis points to 5.50% per year, with effect from the 22nd of July 2022. "

According to the statement, t hree members of the  Committee preferred the announced increase. One member preferred a 100 basis  points increase. Another member preferred a 50 basis point increase.

Lesetja Kganyago considers the revised repurchase rate " remains supportive of credit demand in the near term, while raising rates to levels consistent with the current view of inflation risks ".

South African Reserve Bank told t he  aim of its policy was " to stabilise inflation expectations more firmly around the mid-point of the target band and to increase confidence of hitting the inflation target in 2024 ."

According to the governor of the SARB  t he southern African nation's economy is expected to grow by 2.0%, revised up from 1.7%.