SARB set to raise repo rate amid surging inflation
Indebted South Africans could find themselves a little poorer by the end of Thursday.
The South African Reserve Bank’s Monetary Policy Committee wraps up its meeting on Thursday afternoon, with most economists expecting at least a 50 basis point hike in the repo rate.
The expected hike comes amid consumer inflation surging to its highest level in 13 years in June.
Annual consumer inflation jumped to 7.4 percent in June, from 6.5 percent in May, driven primarily by rising prices for food and transport. Inflation is now well outside the central bank’s target rate of between 3 and 6 percent.
Consumer inflation has soared to the highest level in decades in many countries, fuelled by the war in Ukraine and the easing of Covid restrictions.
That has forced central banks to raise interest rates, risking the prospect of recession as higher borrowing costs hurt businesses and consumers.
