Sarb Governor Lesetja Kganyago announcing the Monetary Policy Commitee's decision on interest rates last week. On Tuesday, Kganyago said the move to hike rates was intended to keep inflation expectations anchored and protect the credibility of monetary policy.
South African Reserve Bank (SARB) Governor Lesetja Kganyago has reaffirmed the central bank's commitment to returning inflation to 3%, arguing that decisive action is necessary to prevent temporary global supply shocks from becoming entrenched in the economy.
Speaking at the Bureau for Economic Research Annual Conference on Tuesday, Kganyago defended the Monetary Policy Committee's recent decision to raise the repo rate from 6.75% to 7%, saying the move was intended to keep inflation expectations anchored and protect the credibility of monetary policy.
The rate increase comes against a backdrop of worsening global inflationary pressures, driven by the prolonged closure of the Strait of Hormuz, elevated oil prices, fertiliser shortages and growing concerns about food inflation.
Kganyago said the central bank had concluded that rising fuel and food costs were beginning to generate broader inflationary pressures across the economy.
