JOHANNESBURG – South African Reserve Bank has increased its repo rate by 25 basis points to 4% according to the announcement by Reserve Bank Governor Lesetja Kganyago.
Kganyago on Thursday made the revelations of the Monetary Policy Committee’s decision in Pretoria.
“The MPC has decided to increase the repurchase rate by 25 basis percentage for 4% per year with effect from 28 January.
“Four members of the committee preferred an increase and one member preferred an unchanged rate.”
He said inflation was a problem driven by higher oil and food prices.
“Given the expected trajectory for headline inflation and upside risks, the committee believes a gradual rise in the repo rate will be sufficient to keep inflation expectations well anchored and moderate the future path of internet rates.”
Kganyago touched on the issue of electricity prices.
“The MPC will seek to look through temporary price shocks and focus on potential second round effects.”
The governor says globally, inflation is a problem and this is one way to stop the upward trend.