South Africa's policy rate on hold as Iran war seen pushing up inflation
This article has been supplied.
South Africa's central bank maintained its main lending rate at 6.75% on Thursday, saying caution was needed as higher energy prices triggered by the US-Israel war against Iran would push up inflation.
Economists polled by Reuters had expected no change in the repo rate, as the Middle East conflict has forced central banks around the world to revise their forecasts and reconsider the path for interest rates.
South Africa's inflation was well-contained in the months before the conflict, slowing to the central bank's 3% target in February, but it is expected to pick up as the effects of anticipated fuel price hikes and a weaker exchange rate filter through.
The decision by the Monetary Policy Committee of the South African Reserve Bank (SARB) was unanimous.
"We warned of elevated risks, and we have been proceeding cautiously in our rate setting," Governor Lesetja Kganyago said, reading out the decision. "Now a crisis has hit, this prudent approach is proving appropriate."
The central bank expects headline inflation to accelerate to around 4% soon, with fuel inflation of more than 18% for the second quarter.
Before the US and Israel started the war and then Iran retaliated, economists had been predicting further policy easing by the SARB this year.
But those bets are now off.
Kganyago said the SARB's projection model showed rates unchanged for a longer period, postponing cuts seen in January.
Article Enquiry
Email Article
Save Article
Feedback
To advertise email advertising@creamermedia.co.za or click here
Research Reports
Projects
Latest Multimedia
Latest News
Showroom
Multotec, recognised industry leaders in metallurgy and process engineering help mining houses across the world process minerals more efficiently,...
VISIT SHOWROOM
Goodwin Submersible Pumps Africa is sole distributors for Goodwin electrically driven, submersible, abrasion resistance slurry pumps.
VISIT SHOWROOM
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
