South African Reserve Bank Interest Rate Hike Exceeds Expectations
May 25, 2023
An interest rate increase of 50 basis points to 8.25% decided unanimously today matched the prior hike in March and is the tenth increase since the rate was raised from a pandemic low of 3.50% to 3.75% in November 2021. CPI inflation of 6.8% in April exceeded the 3-6% target range ceiling, and indicators of expected inflation have edged higher. One inflationary worry has been recent weakness of the rand, which fell 4.7% against the dollar since the South African Monetary Policy Committee last met in March. In the statement explaining today’s action, the forecasts for average consumer price inflation this year and next are each nudged 0.2 percentage points higher.
Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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