Andrew
South Africa’s repo rate has been pushed sharply up, by 75 basis points (bps) – the steepest hike since September 2002.
The rate hike was announced by South African Reserve Bank (SARB) Governor Lesetja Kganyago on Thursday, moving to front-load a steeper increase to rein in resurgent inflation.
This means SA’s prime lending rate (of commercial banks) will increase to 9 percent.
Three members of the MPC voted for a 75bp hike, one for a 100bp hike and one for a 50bp increase.
While many economists originally predicted a 50bp hike for the SARB’s July Monetary Policy Committee (MPC) meeting, that was before the higher-than-expected June headline inflation figure of 7,4 percent was published on Wednesday.
Kganyago added that achieving a prudent public debt level, increasing the supply of energy, moderating administered price inflation and keeping wage growth in line with productivity gains would enhance the effectiveness of monetary policy and its transmission to the broader economy. − Moneyweb.
Online Reporter