South Africa’s central bank raised its benchmark interest rate by half a point on Thursday to 4.75%, after expressing concerns about inflation, which remains stubbornly high.
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The monetary institution had considerably lowered this rate in 2020, brought back in July to the historically low level of 3.5%, to mitigate the economic shock of the Covid-19 pandemic.
But inflation having increased, it then raised it three times by a quarter of a point, in November 2021 and then at the end of January and the end of March.
Despite these successive increases, consumer prices rose by 5.9% in March and April in South Africa, where monetary policymakers want to keep inflation within a range of 3% to 6%.
Higher-than-expected inflation has prompted major central banks to accelerate the normalization of global policy rates, tightening global financial conditions, South Africa’s central bank governor Lesetja Kganyago said.