Sarb announces sharper 75bp repo rate hike

South Africa’s repo rate has been pushed sharply up, by 75 basis points (bps) – the steepest hike since September 2002.

The rate hike was announced by South African Reserve Bank (Sarb) Governor Lesetja Kganyago on Thursday, moving to front-load a steeper increase to rein in resurgent inflation.

The 75bp hike brings the repo rate to 5.5%.

This means SA’s prime lending rate (of commercial banks) will increase to 9%.

While many economists originally predicted a 50bp hike for the Sarb’s July Monetary Policy Committee (MPC) meeting, that was before the higher-than-expected June headline inflation figure of 7.4% was published on Wednesday.

Read: Record-low real rate sets stage for aggressive SA hike