SABB announces jumbo interest rate hike
By 50 basis points from 7.25% to 7.75%
The next monetary policy announcement by the Bank of Namibia is expected to take place on 19 April 2023.
The South African Reserve Bank (SARB) announced a second consecutive increase in the repo rate this year. SARB raised the repo rate by 50 basis points from 7.25% to 7.75% yesterday.At the first monetary policy announcement in January, the central bank increased the repo rate by 25 basis points from 7% to 7.25%. The prime lending rate currently stands at 11.25%.
South Africa’s annual consumer inflation rose for the first time in four months, edging to 7.0% in February from 6.9% in January, according to Stats SA.
The South African Reserve Bank’s monetary policy committee prefers to anchor inflation expectations close to the 4.5% midpoint of its target range of 3%-6%.
Fin24 recently reported that South African inflation expectations rose at the start of 2023, suggesting the central bank may keep interest rates higher for longer.
Average inflation expectations for the year increased to 6.3% in the first quarter from 6.1% previously, according to a survey conducted by the Stellenbosch-based Bureau for Economic Research.
Fin24 further reported that that the International Monetary Fund (IMF) praised the South African Reserve Bank (SARB) for successfully anchoring inflation expectations and said it expected inflation to fall within the target range of between 3% and 6% by the end of 2023. South Africa’s third monetary policy announcement for the year is expected to take place on 25 May.
Namibia
Namibia has close economic ties with South Africa as the local currency is pegged to the rand.
At the first monetary policy announcement for the year in February, the Bank of Namibia increased the repo rate by 25 basis points from 6.75%.
The repo rate in Namibia currently stands at 7%, while the prime lending rate stands at 10.75%. Inflation increased to 7.2% in February from 7% recorded in January. The Bank of Namibia does not target inflation.
According to the Namibia Statistics Agency (NSA), the domestic economy expanded by 4.6% in 2022. The Bank of Namibia projects economic growth to moderate to 3% in 2023.
“Risks to domestic growth are predominantly in the form of monetary policy tightening globally and high costs of key import items that are likely to remain for the entire forecast period,” the central bank said.
Recently, the US Federal Reserve raised its benchmark lending rate as it sought to strike a balance between curbing high inflation and averting further upheaval in the commercial banking sector, Fin24 reported.
The next monetary policy announcement by the Bank of Namibia is expected to take place on 19 April 2023. –[email protected]