JOHANNESBURG, May 28 (Xinhua) -- The South African Reserve Bank (SARB) on Thursday raised its repurchase rate by 25 basis points to 7 percent, citing rising inflationary pressures linked to higher fuel and food costs amid growing global uncertainty.
Announcing the decision at a virtual press briefing, SARB Governor Lesetja Kganyago said consumer inflation accelerated to 4 percent in April from 3.1 percent in March, mainly driven by surging energy prices.
Fuel prices rose by 11.4 percent after declining by 8.7 percent in March, marking one of the sharpest increases in fuel inflation on record, he said, adding that services inflation also climbed to 4.6 percent, reflecting higher transport, insurance and financial service costs.
"We face a painful combination of higher global uncertainty and reduced disposable income. This will hit both investment and household consumption, which have been our main growth drivers," Kganyago said.
The central bank revised its oil price assumptions upward and warned of renewed pressure on food prices due to rising diesel and fertilizer costs in the agricultural sector.
"Our forecast now has headline inflation averaging 4.4 percent this year and 3.7 percent next year before returning to the 3 percent target in 2028. Core inflation is also higher, peaking early next year," he added.
