Tuesday, June 6, 2023
HomeBusinessNews24.com | JUST IN | Interest rate hiked by 50 basis points

News24.com | JUST IN | Interest rate hiked by 50 basis points




SA Reserve Bank governor Lesetja Kganyago. Photo: Netwerk24

SA Reserve Bank governor Lesetja Kganyago. Photo: Netwerk24

The SA Reserve Bank’s monetary policy committee hiked interest rates by 50 basis points to 8.25%. This is in line with what many economists and the market expected.

The earlier consensus expectation was for 25 basis points, but the rand’s crash to a record low in the wake of US allegations that Russia received arms in South Africa has raised inflation risks. A weaker rand will fuel inflation.

The members of monetary policy committee all voted unanimously in favour of the hike. 

The central bank has now hiked rates by 475 basis points of tightening since November 2021.

On a new home loan of R2 million at the prime rate, the latest increase hikes the monthly instalment by around R690. Since November 2021, monthly payments on a R2 million home loan are almost R6 200 more expensive due to a raft of rate hikes.

South Africa’s annual inflation rate reached an 11-month low in April, cooling to 6.80% from 7.10% in March, it was announced on Tuesday. Inflation slowed by more than economists expected.

However, food inflation continued to remain sticky around 14-year highs, at 13.90% – from 14% the previous month.

Some economists expect the first interest rate cut only at the start of next year.

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