South African Reserve Bank (SARB) Governor Lesetja Kganyago says the MPC decided to raise the repurchase rate by 25 basis points to 7.25% per year, effective January 27, 2023.
This comes as inflation remains above the central bank’s target bracket.
Kganyago argues that the economic and financial conditions are expected to remain more volatile for the foreseeable future. “In this uncertain environment, monetary policy decisions will continue to be data dependent and sensitive to the balance of risks to the outlook.”
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The Governor says as a result of extensive load-shedding and other logistical constraints, the Bank now forecasts 0.3% GDP growth in 2023.
He explains that high inflation and slow economic growth continue to shape global conditions. “Russia’s war in Ukraine drags on & recession risks remain elevated in the Euro Area, even though energy constraints have eased.”
