SA’s central bank lifted its benchmark interest rate for a third straight meeting and signaled it will raise borrowing costs more aggressively through 2024, in part to counter inflationary pressures stemming from UkraineRussiaConflict. Moneyweb
South Africa’s central bank lifted its benchmark interest rate for a third straight meeting and signaled it will raise borrowing costs more aggressively through 2024, in part to counter inflationary pressures stemming from Russia’s war with Ukraine. The implied policy rate path of the central bank’s quarterly projection model, which the Monetary Policy Committee uses as a guide, now indicates a key rate of 5.06% by year-end, compared with its January forecast of 4.91%.
Thursday’s rate hike was prompted by a deterioration in the outlook for inflation, which has more than doubled since the economy started opening up from a hard lockdown in 2020. Russia-Ukraine conflict The invasion of Ukraine adds to supply-chain pressures and raises the risk that price growth will breach the 6% ceiling of the central bank’s target range. The Sarb now sees headline consumer prices peaking at 6.2% in the second quarter of this year and averaging 5.8% in 2022.
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