Reserve Bank raises repo rate by 25 basis points — and more to come
The Reserve Bank's monetary policy committee on Thursday raised the repo rate 25 basis points to 3.75%.
The repo rate has been at 3.5% since the middle of 2020.
Reserve Bank governor Lesetja Kganyago said that higher than expected inflation was a major concern.
“Against this backdrop, the MPC decided to increase the repurchase rate by 25 basis points (a quarter of a percentage point) to 3.75% per year, with effect from November 19, 2021. Three members of the committee preferred an increase and two members preferred an unchanged stance.
“The implied policy rate path of the quarterly projection model (QPM) indicates an increase of 25 basis points in the fourth quarter of 2021 and further increases in each quarter of 2022, 2023 and 2024,” Kganyago said.
He added that the MPC believed that a “gradual rise in the repo rate” was enough to “keep inflation expectations well anchored and moderate the future path of interest rates”.