South African Reserve Bank increases repo rate by 50 basis points to 4.75%

THE South African Reserve Bank’s Monetary Policy Committee (MPC) has voted to hike interest rates by 50 basis points, taking the repo rate to 4.75% per annum.

The hike was in line with most analysts’ forecasts, while a forecast report from Finder, citing 22 economists, academics, and property specialists, pointed to a 50 basis point hike.

Four members of the committee preferred the announced increase and one member preferred a 25 basis point rise in the repo rate.

The implied policy rate path of the bank’s forecast model, given the inflation forecast, indicates gradual normalisation through to 2024, though the bank stressed that it would make future decisions based on available data.

“Economic and financial conditions are expected to remain more volatile for the foreseeable future. In this uncertain environment, policy decisions will continue to be data-dependent and sensitive to the balance of risks to the outlook,” said Reserve Bank