Reserve Bank governor Lesetja Kganyago announced on Thursday that the monetary policy committee had increased the repo rate by 25 basis points to 7%, effective from 29 May.
The South African Reserve Bank has raised the interest rate for the first time since 2023, warning that escalating tension in the Middle East, rising oil prices and climate-related food risks could trigger a fresh wave of inflation.
Reserve Bank governor Lesetja Kganyago announced on Thursday that the monetary policy committee had increased the repo rate by 25 basis points to 7%, effective from 29 May.
Four members of the committee supported the increase, while two preferred leaving the rate unchanged.
The move is expected to increase borrowing costs for households and businesses struggling with high food, fuel and electricity prices. Commercial banks are expected to raise the prime lending rate in line with the increase.
