JOHANNESBURG, Sept. 23– The South African Reserve Bank (SARB) on Wednesday raised its policy rate by 25 basis points to 7.25 percent, citing heightened inflation risks amid renewed fuel price pressures and persistent global supply shocks.
The Monetary Policy Committee unanimously decided to raise the rate, with the decision effective on Sept. 25, according to the central bank.
SARB said escalating tensions in the Middle East and the Russia-Ukraine conflict were disrupting energy and food supplies, contributing to a large and persistent global supply shock.
The central bank raised its near-term inflation forecasts mainly due to higher fuel prices. Headline inflation is expected to rise above 5 percent later this year and early next year before easing as the fuel price shock recedes, and is projected to return to around the 3-percent target toward the end of 2027.
“A few months back, it seemed that the fuel-price shock might be unwinding, but now it has intensified,” the statement said.
SARB also lowered its forecast for South Africa’s economic growth this year to 1.2 percent from 1.4 percent, after the economy contracted by 0.2 percent in the second quarter. It expects growth to rebound in the second half of the year, while risks to the outlook remain tilted to the downside.
The rate hike came as South Africa’s annual consumer inflation edged up to 4.4 percent in August from 4.3 percent in July. (Namibia Daily News / Xinhua)
