South Africa Central Bank Raises Repo Rate to 7%
South African Reserve Bank (SARB) Announces Rate Decision
The South African Reserve Bank (SARB) raised its main repo rate to 7% from 6.75% on Thursday, citing higher global uncertainty due to the war in Iran and rising inflation.
Reasons for the Rate Hike
SARB Governor Lesetja Kganyago stated that the economy was gaining momentum before the shock, but now faces a painful combination of higher global uncertainty and reduced disposable income. The decision ends the cutting cycle that began in September 2024.
Inflation and Growth Forecasts
Headline inflation was 4% in April, up from 3.1% in March. The SARB projects GDP growth of 1.2% this year, down from its March estimate of 1.4%. The economy expanded by 1.1% in 2025.
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