The South African Reserve Bank governor, Lesetja Kganyago, announced on Thursday that the repo rate has been raised by 25 basis points to 7.25% and the prime rate is now 10.75%.
“The Monetary Policy Committee decided to increase the repurchase rate by 25 basis points to 7.25% per annum with effect from 27 January 2023. Three members of the committee preferred the announced increase [while] two members preferred a 50 basis points increase,” said Kganyago.
It’s the eighth consecutive increase in the repo rate, which means South African consumers will be forced to pay even more to settle their home loans, car finances and other debts.
The announcement follows the meeting of the Monetary Policy Committee (MPC).
During his delivery of the MPC statement on Thursday afternoon, Kganyago expressed serious concern over the country’s economic growth, with loadshedding and other logistical constraints taking their toll.
“Investment is still positive but is revised down due to weaker confidence and lower growth than we previously expected,” he added. The country’s GDP is forecasting only 0.3% growth this year.
Additionally, due to the impact of power cuts, the federation warns that consumers may see food prices increase in 2023.
“Domestic food inflation continues to surprise higher. Loadshedding may have broader price effects on the cost of doing business and the cost of living,” said Kganyago.
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Picture: Cape {town} Etc Gallery