The Central Bank of South Africa raised its key rate on Thursday by 75 basis points to 6.25%, the second increase in two months, in a context of high inflation.
The rate had already experienced in July its largest increase in 10 years, 5.5%. This announcement comes after numerous decisions by central banks, including that of the United States on Wednesday, to raise their main interest rate.
The monetary policy committee has decided to raise the rate by 75 basis points to 6.25%, South Africa’s central bank governor Lesetja Kganyago told a televised press conference. .
The economic and financial situation is expected to remain volatile in the near future, he added.
This is the fifth consecutive increase of the financial organization which is concerned about the level of price increases and the sharp slowdown in the country’s economy.
Inflation reached a record 7.8% over one year in July, the highest for 13 years. It fell slightly in August (7.6%) thanks to a drop in fuel prices.
In many countries, inflation has reached its highest level in decades, fueled in particular by the war in Ukraine and the economic recovery following the easing of restrictions linked to the pandemic.
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After a rapid recovery, the GDP of Africa’s leading industrial power contracted in the second quarter compared to the previous one. The Central Bank has revised its growth estimates downwards, expecting a slowdown to 1.3% for 2023, before a slight rebound to 1.5% in 2024.