The South African Central Bank announced Thursday to raise its main key rate by 50 basis points to 8.25%, this tenth consecutive increase aimed at controlling inflation “sustainably”.
Inflation in the continent’s leading industrial power fell to its lowest level in nearly a year in April, slowing to 6.8% from 7.1% in March, national statistics agency StatsSA said the day before. , although food prices remain high.
However, the Central Bank announced on Thursday annual inflation forecasts on the rise, 6.2% on average this year, or +0.2 percentage points compared to the latest forecasts.
Headline inflation for 2023 is revised upwards due to rising commodity and food prices, central bank governor Lesetja Kganyago said in a statement.
Inflation has risen all over the world, fueled in particular by soaring energy and food prices after Russia’s invasion of Ukraine.
On Thursday, the South African rand fell again after the Central Bank’s announcement, trading at 19.74 against the US dollar at 15:27 GMT. The financial institution warned of a probable further weakening of the local currency, due among other things to the electricity crisis.
South Africa has been hit for months by record power cuts that are weighing on the economy. According to the government, load shedding costs more than $50 million in lost production every day.
The public company Eskom, which provides the vast majority of the country’s electricity, is weighed down by debts as well as by a fleet of outdated and failing coal-fired power stations. Unable to produce enough, she imposes cuts of up to 12 hours a day.
Although energy supply problems and logistical issues are not considered monetary policy, they have a negative impact on inflation and demand, increasing the cost of living and doing business. economy, underlined Mamello Matikinca-Ngwenya, economist at the South African bank FNB.