S/Africa raises repo rate to 6.25 percent

By Agence de Presse Africaine Last updated Sep 23, 2022

APA-Pretoria South Africa has raised its repurchase rate by 75 basis points to 6.25% per year starting from Friday, the country’ s Reserve Bank’s Monetary Policy Committee has announced in Pretoria. This is the fifth consecutive increment following a two 25- basis points hike in November 2021 and in January this year, the governor said. The level of the…

APA-Pretoria (South Africa) South Africa has raised its repurchase rate (repo rate) by 75 basis points to 6.25% per year starting from Friday, the country’s Reserve Bank’s Monetary Policy Committee (MPC) has announced in Pretoria.

Addressing reporters on Thursday, Reserve Bank Governor Lesetja Kganyago, who chairs the five-member MPC, said three members of the committee preferred the announced increase.

“And two other members preferred a 100-basis points increase,” he said.

This is the fifth consecutive increment following a two 25-basis points hike in November 2021 and in January this year, the governor said.

In addition, the repo rate was hiked by 50-basis points at the committee’s May meeting, and at its July gathering the MPC raised it yet again by a 75-basis point, he added.

The level of the repurchase rate was now closer to the level prevailing before the start of the Covid-19 pandemic in March 2020, the governor said.

Kganyago said the revised repurchase rate path remained supportive of credit demand in the near term, while raising rates to levels more consistent with the current view of inflation risks.

“The aim of policy is to anchor inflation expectations more firmly around the mid-point of the target band, and to increase confidence of hitting the inflation target in 2024,” he said.

NM/as/APA