South Africa’s central bank raises main interest rate to 7.25%

South Africa’s central bank raised its key interest rate by 25 basis points (bps) to 7.25% on Wednesday, saying it wanted to steer inflation towards its 3% target.

The decision by policymakers at the South African Reserve Bank (SARB) was unanimous.

The majority of economists polled by Reuters had expected the 25 bps increase, as the escalation in the Iran war since the SARB’s last policy meeting in July has driven up oil prices and dampened the global economic outlook.

The SARB targets inflation of 3% with a tolerance band of 1 percentage point either side.

Data earlier on Wednesday showed headline inflation edged up to 4.4% year on year in August from 4.3% in July.

REUTERS