THE South African Reserve Bank’s (SARB’s) Monetary Policy Committee has voted to hike interest rates in the country by 50 basis points, against market expectations.
This will take the repurchase rate to 7.75% and push the prime lending rate to 11.25%.
The latest rate hike marks the tenth hike in the current cycle, with the total adjustment being 425 basis points since the hike cycle started in November 2021.
Rates are now at their highest point in 13 years (June 2009), when the fallout from the global financial crisis weighed on the local currency.
According to Reserve Bank governor Lesetja Kganyago, the hike comes on back of a persistently high inflationary environment, alongside troubles for both local and global economic growth.
The South African economy contracted by 1.3% in the fourth quarter of 2022, considerably worse than the SARB had anticipated back in January. This was due to the persistent load
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