The South African Reserve Bank (SARB) has increased its repurchase rate by 25 basis points to 7.25% to manage persistent inflation risks and global economic shocks.

Announcing the decision by the Monetary Policy Committee, Governor Lesetja Kganyago confirmed that the prime lending rate will consequently rise to 10.75%. The central bank cited escalating geopolitical tensions and a fresh surge in international fuel prices as primary drivers threatening to push near-term headline inflation further above its 3% target.

The rate hike comes despite a 0.2% contraction in the local economy during the second quarter, with central bank officials projecting medium-term economic growth to remain constrained at around 2%.

–ChannelAfrica/SABC–