The South African Reserve Bank announced it would hike the interest rate by a further 75 bps on Wednesday following the conclusion of its Monetary Policy Committee meeting.
Three members of the MPC preferred a 75 bps hike while two preferred a 100 bps hike.
A second straight 75 bps hike means the benchmark has returned to its January 2020 level, at 6.25%. The SARB has fully unwound its Covid-19 stimulus measures following the latest repo rate hike. The Reserve Bank has increased rates five times consecutively since November last year, as it seeks to tame runaway inflation driven by food and fuel costs.
The SARB wants inflation to be between 3% and 6% – its target band. On Wednesday, data showed the consumer price index had dropped to 7.6% for August.
The rand is currently trading stronger against the dollar at R17.58/$.
This is a developing story.
