JOHANNESBURG, July 21 (Xinhua) -- The South African Reserve Bank (SARB) on Thursday raised the repo rate by 75 basis points, the biggest increase since September 2002, to 5.5 percent per annum with effect from July 22, owing to inflationary pressures.
"Alongside currency depreciation, other risks to the inflation outlook, such as increased food and fuel prices, have been realized, pushing up unit labor costs and expectations of future inflation," Governor of the SARB Lesetja Kganyago announced the increase at a press briefing about the monetary policy committee in Pretoria.
He said headline inflation breached the target range in the second quarter of this year and this trend is expected to continue until the second quarter of 2023, however, it is expected to revert to the mid-point of the target range by the fourth quarter of 2024 following declining fuel and food inflation.
The central bank increased the repo rate by 25 basis points in November last year and January this year. In May, the repo rate was hiked by 50 basis points.
Statistics South Africa, the national statistics agency, on Wednesday announced annual consumer inflation jumped to 7.4 percent in June, the highest since May 2009, mainly driven by rising transport and food prices. ■