Reserve Bank lifts rates by 75 bps

The SA Reserve Bank raised interest rates for a sixth meeting running to protect the weakened rand and stabilise inflation expectations.

The monetary policy comwm:i2tt2ee.8(m4p1cm) m on Thursday lifted the repo rate by 75 basis points (bps) to 6.25%, as predicted by the majority of economists surveyed by Bloomberg.

The increase comes after July’s 75 bps hike, making these the two largest successive increases in two decades.

The MPC said it now expects GDP growth to fall slightly to 1.9% from the 2% growth estimate in July.

GDP growth for 2023 was upgraded to 1.4% from 1.3% in July and to 1.7% in 2024 from 1.5%.

Citing Russia’s war in Ukraine, Reserve Bank governor Lesetja Kganyago said global growth forecasts for 2022 were revised down from 3.3% in July to 3%.

Global growth for 2023 is lowered to 2%, from 2.5% in July and 2.7% in May.

The Bank kept its headline consumer price inflation forecast for 2022 at 6.5%. For 2023, headline inflation was revised lower to 5.3%, down from 5.7%.