By Ebi Kesiena
South Africa’s Central Bank raised its main interest rate again to battle inflation on Thursday, but at a slower pace, as it predicts weak economic growth, following pressing power blackouts.
Central banks worldwide have been raising rates to tame soaring consumer prices.
It would be recalled that South African monetary policymakers started raising rates in November 2021 and unleashed their steepest hike in a decade 0.75 percentage points in July last year.
After two more 0.75-percentage-point increases, the central bank said Thursday, it was lifting the rate by 0.25 percentage points.
So, the benchmark currently stands at 7.25 percent.
The central bank said it expects inflation to slow to 5.4 percent in 2023, compared to 6.9 percent last year.
Governor Lesetja Kganyago, told a news conference in Pretoria that “the revised repurchase rate remains supportive of credit demand in the near term, while raising rates to levels more consistent with the current view of inflation and risks to it.”
The bank said that the economy is expected to grow by just 0.3 percent in 2023, due to the electricity supply crisis plaguing the continent’s most industrialised economy.
The economy grew to 2.5 percent last year, up from 1.8 percent in 2021.
