The South African Reserve Bank has raised its benchmark interest rate for the second time this year as policymakers seek to contain renewed inflationary pressures linked to the ongoing wars in Iran and Ukraine.
The six-member Monetary Policy Committee increased the key rate by 25 basis points to 7.25%, Governor Lesetja Kganyago announced in Pretoria on Wednesday.
The decision was in line with the expectations of most economists surveyed by Bloomberg, with 19 of 22 economists forecasting a 25-basis-point increase. The remaining three expected the central bank to leave rates unchanged.
The rate increase comes as renewed global geopolitical tensions threaten to push up prices and weigh on the economic outlook.
The central bank’s decision reflects growing concerns over inflationary pressures stemming from the international conflicts, which have affected commodity markets and contributed to uncertainty in the global economy.
The latest increase marks the second rate hike by the Reserve Bank this year, signalling a continued focus on keeping inflation under control while navigating heightened global economic risks.
Kganyago announced the decision following the Monetary Policy Committee’s meeting in Pretoria.