The South African Reserve Bank (SARB) has increased the repo rate by 50 basis points to 4.75% per year, with effect from Friday, 20 May 2022.
Announcing the move Thursday SARB Governor Lesetja Kganyago warned inflation was heading beyond the central bank’s target of between 3% to 6%.
“The bank’s forecast of headline inflation for this year is revised higher to 5.9% [from 5.8%], primarily due to the higher food and fuel prices.”
Kganyago said there was consensus within the monetary policy committee to raise the rate by 50 basis points.
“The rand has since depreciated strongly from April due to the start of policy normalisation in major economies and the slowdown in China’s economy.”
The governor said a number of factors were driving inflation including electricity and oil prices driven by the situation in Ukraine.
