Sarb hikes rates

The Reserve Bank raised its main lending rate by 25 basis points to 4.25% on Thursday, citing inflation risks linked to the war in Ukraine. The move was in line with expectations.

The five-member monetary policy committee was split 3-2 in its decision, with two members preferring a larger 50-basis-point move. It was the third hike in a row following similar moves in January and November.

The rand extended gains on the rate hike.

“Global producer price and food price inflation continued to surprise higher in recent months and could do so again, particularly if the war in the Ukraine persists into the growing season,” the Sarb said in its latest monetary policy statement.

“Oil prices increased strongly through 2021 and are up again sharply year to date, propelled higher also by the war and economic sanctions,” the Bank said.  — Alexander Winning, Olivia Kumwenda-Mtambo and Promit Mukherjee, (c) 2022 Reuters