The Monetary Policy Committee (MPC) hiked the repo rate by 25 basis points, to 7.25%, as from the 25th of September.
Lesetja Kganyago, Governor of the South African Reserve Bank (SARB), said this was a unanimous decision taken by the committee, motivated by disrupted global supply chain systems due to ongoing conflict in the Middle East as well as the Russia-Ukraine war.
He said the global shocks continue to hurt the South African economy.
“Turning to South Africa, in our last meeting we warned of downside risks to growth. The data has now shown that the economy contracted in the second quarter, by 0.2%. We still expect a rebound during the second half of the year, with annual growth projected at 1.2%” he added.
Petrol prices are also expected to rise despite the food inflation now at its lowest since 2010.
Kganyago said this is due to strong harvests, as well as a levelling off in meat prices following the outbreak of foot-and-mouth disease.
Picture: Supplied