The South African Reserve Bank (SARB) decided unanimously at its Monetary Policy Committee meeting on the 23rd to raise the repo rate by 25 basis points to 7.25%. South Africa's Consumer Price Index rose 4.4% year-on-year in August, an acceleration from July's 4.3%, as the central bank aims to bring inflation back to its 3% target. Governor Lesetja Kganyago cited intensifying fuel price shocks and rising global interest rates while emphasizing the central bank's mandate for price stability. The decision pushes the prime lending rate to 10.75%.

The South African Reserve Bank (SARB) decided unanimously at its Monetary Policy Committee (MPC) meeting on the 23rd to raise its policy repo rate by 25 basis points (bp) to 7.25%, as it seeks to bring inflation back to its target of 3%.

According to Reuters, South Africa's Consumer Price Index (CPI) rose 4.4% year-on-year in August, accelerating from 4.3% in July. The central bank's inflation target is 3%, with a tolerance band of one percentage point on either side.

SARB Governor Lesetja Kganyago said the decision was unanimous. The rate hike pushes the prime lending rate to 10.75%.

"A few months ago it looked like the fuel price shock was easing, but now it is actually intensifying," Kganyago said. He also noted that interest rates are rising globally, adding: "In an environment of high uncertainty, we have taken a cautious approach to setting interest rates, but we remain focused on our mandate of price stability. It is critical that inflation returns to 3% as the current shocks subside, and we bear the responsibility to deliver that outcome."

According to a Reuters poll, a majority of economists had expected a 25bp rate hike. Since the previous meeting in July, oil prices have risen again amid escalating tensions in Iran, and the global economic outlook has deteriorated.