South Africa’s central bank raised its benchmark interest rate by three-quarters of a percentage point to 5.5 percent on Thursday — the steepest hike in a decade.
The move, announced a day after South Africa reported a 13-year high in inflation — was the fourth-rate hike in a row, as the South African Reserve Bank voiced concerns over high inflation and weak economic growth.
The central bank “decided to increase the repurchase rate by 75 basis points to 5.50 percent per year,” with effect from Friday, said governor Lesetja Kganyago said during a televised media briefing.
“We hear the cries of South Africans that inflation is eroding their income, their salaries and their wages,” he said.
“And we are determined as the South African Reserve Bank to protect the income of South Africans.”
The rate lift was higher than market analysts’ forecasts of an increase of 50 basis points.
Inflation has soared to the highest level in decades in many countries, fuelled by the war in Ukraine and the easing of Covid restrictions.