After the interest rate decision, the rand extended earlier gains to rise nearly 2% against the dollar. Moneyweb Currency
South Africa’s central bank raised its main lending rate by a higher than expected 50 basis points to 7.75% in a decision announced on Thursday. The rate increase was larger than the 25 basis point increase expected by the majority of economists polled by Reuters. South Africa’s rand extended earlier gains to rise nearly 2% against the dollar after the interest rate decision. “This is a surprise to financial markets,” Rand Swiss Portfolio Manager Gary Booysen said.
Read: Sarb hikes repo rate by 50bps The five-member Monetary Policy Committee was split 3-2 in its decision, with 3 members preferring a 50 bps increase and 2 wanting a 25 bps rate increase. In his speech, central bank governor Lesetja Kganyago said risks to the inflation outlook are assessed to the upside. “Despite some easing of producer price and food inflation, global price levels remain elevated,” he said.
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