JOHANNESBURG, March 30 (Xinhua) -- The South African Reserve Bank (SARB), the country's central bank, announced on Thursday to increase the repurchase rate by 50 basis points to 7.75 percent due to inflationary pressures, with effect from Friday.
"The revised repurchase rate is now less accommodative and is more consistent with the current view of risks to inflation. The aim of the policy is to anchor inflation expectations more firmly around the mid-point of the target band and to increase confidence of attaining the inflation target sustainably over time," said SARB governor Lesetja Kganyago when presenting the decision of the bank's monetary policy committee.
Guiding inflation back towards the mid-point of the target band can reduce the economic costs of high inflation and enable lower interest rates in the future, he said.
South Africa's economic and financial conditions are expected to remain more volatile for the foreseeable future, according to Kganyago, who noted that the country now faces load shedding as well as rising inflation driven by price increases of fuel, electricity and food.
The SARB's forecast for South Africa's economic growth in 2023 is lowered to 0.2 percent from the previous forecast of 0.3 percent in January, due to extensive load shedding and logistical constraints, Kganyago said. ■
