South Africa’s (SA) central bank raised its key interest rate by 25 basis points to 7% this Thursday, saying the decision was aimed at managing risks and ensuring that inflation returns to target.
The majority of economists polled by Reuters had expected a 25-basis-point increase in the policy rate, after inflation accelerated sharply in April.
Annual inflation was 4.0% in April, up from 3.1% in March, driven mainly by fuel price rises triggered by the United States-Israel war against Iran.
The SA Reserve Bank (SARB) targets inflation of 3% with a tolerance band of 1 percentage point either side.
The SARB is now among only a handful of African central banks to have raised rates during the Iran war, joining others like Rwanda, Botswana and Mauritius.
Many other central banks on the continent, like their global peers, have kept rates unchanged while they assess war-driven inflation risks.
–Reuters–
