SARB raises rates by 50bp

Fri, 13 Jun 2008

The SA Reserve Bank has hiked the repo rate by 50 basis points to 12 percent, the bank's governor Tito Mboweni said on Thursday following a Monetary Policy Committee meeting.

This raised the prime rate that banks charge their clients to 15.5 percent.

Mboweni had last month threatened a 200 basis points increase due to the country's high inflation figures.

Most economists had forecast a 100 basis points rise in the repo rate.

All 22 economists polled by Reuters predicted the repo rate would rise, with 18 forecasting a 100 basis point increase.

The remainder stuck to forecasting a 50 basis point hike.

Inflation, pushed by the soaring cost of both fuel and food, is well out of the bank's inflation targetting range of three to six percent.

CPIX for April rose to 10.4 percent from 10.1 percent in March, according to Statistics SA.