Economy, Africa

South African Reserve Bank hikes rates by 50 basis points to 4.75%

Lockdowns in China, Russia-Ukraine war weigh heavily on growth, contribute to higher inflation, central bank says

Övünç Kutlu   | 19.05.2022
South African Reserve Bank hikes rates by 50 basis points to 4.75%

ANKARA 

The South African Reserve Bank made a rate hike of 50 basis points on Thursday, raising the repurchase rate to 4.75% per year from 4.25%.

While four members of the Monetary Policy Committee preferred the scale of the hike, one voted for a 25 basis point rise, the central bank said in a statement.

It marks the fourth time the central bank has raised rates after increasing borrowing costs by 25 basis points at each of the last three meetings.

Lockdowns in China from the new coronavirus outbreak and Russia's war on Ukraine "weigh heavily on global economic growth and contribute to higher inflation," said the bank.

"The war has impaired the production and trade of a wide range of energy, food and other commodities and will continue to do so for some time," it added.

The central bank said its forecast of headline inflation for 2022 is revised up to 5.9%, from 5.8%, due to the higher food and fuel prices.

Annual consumer inflation in South Africa rose 5.9% in April, from the same month of last year. Producer inflation was up 11.9% in March on an annual basis.

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