Kevin Lings, senior economist at Stanlib, unpacked the announcement with eNCA's Devan Murugan. Courtesy of #DStv403
JOHANNESBURG - The Reserve Bank has hiked the interest rate by 75 basis points, adding more strain on cash strapped South Africans.
From 23 September South Africans will be paying more on loans.
Governer Lesetja Kganyago made the announcement on Thursday.
He said, "the MPC decided to increase the repurchase rate by 75 basis points to 6.25% per year with effect from the 23rd of September 2022."
"Three members of the committee preferred the announced increase, two members preferred 100 basis points increase."
"The level of the repurchase rate is now closer to the levels prevailing before the start of the pandemic. The revised repurchase rate path remains supportive of credit demand in the near term while raising rates to levels more consistent with the current view of inflation risks."
"The aim of policy is to anchor inflation expectations more firmly around the mid-point of the target bend and to increase confidence of hitting the inflation target in 2024."