In announcing the MPC decision on Thursday, Reserve Bank Governor Lesetja Kganyago highlighted 'persistent and elevated financial stability risks', despite an improved global growth outlook
Reserve Bank governor Lesetja Kganyago announced the monetary policy committee's 50-basis point hike in the repo rate to 8.25%South African consumers can expect to feel more financial pain, as the Reserve Bank's monetary policy committee increased the repo rate by 50 basis points to 8.25%. This means that commercial banks will in turn hike the prime lending rate to customers, from the current 11.25% to 11.75%. The decision to hike the repo rate was a unanimous one.
Core inflation around the world continues to rise, the governor said. South Africa's consumer price index came in at 6.8% for April, still well outside the Reserve Bank's 3% to 6% target band. This compares with the global inflation forecast of 7%. The core drivers of South Africa's inflation rate are fuel, electricity and food price inflation, with the last coming in higher than the other two. Food price inflation is expected to come in at 10% for 2023 .
Kganyago said that the rate decisions would not be amended until the inflation rate began to normalise to the median target inflation. He added:
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