Sarb hiked repo rate by another 75bps

The South African Reserve Bank (Sarb) on Thursday raised its repo rate by 75 basis points to 7%, as widely expected.

It is the second consecutive hike by such a margin and the seventh in a row as part of the bank’s Monetary Policy Committee (MPC) moves to bring soaring inflation under control.

The decision, announced by Sarb Governor Lesetja Kganyago after the last MPC meeting, brings SA’s prime lending rate to 10.5% for 2022.

This is well in line with pre-pandemic levels, leaving the Sarb with no choice but to announce another sharp repo rate hike after October headline inflation surprised at 7.6%.

Read: SA’s CPI rises to 7.6%

Before the October consumer price index (CPI) was released on Wednesday, most economists and market commentators were predicting a 75bps rise domestically.

This after two members of Sarb’s MPC asked for a 100bps hike at the bank’s last meeting in September, along with high petrol and diesel prices fueling inflation.

On Thursday, Kganyago said three members of the MPC voted for a 75bps hike, while 2 voted for 50bps this time.

This points to possible moves of 75bps or more in Sarb’s current hike period.

Responding to questions from the media after the MPC’s announcement, Kganyago said the October CPI reading surprised the Sarb with inflation expectations at 7.3%.


  • The risk of global recession is high, economic growth is slowing down.
  • Sarb’s global growth forecast has been lowered to 1.9%.
  • Sarb expects the SA economy to grow by 1.8% in 2022, 1.1% in 2023 and 1.4% in 2024 (down from previous forecasts) and 1.5% in 2025.
  • Risks to the medium-term domestic outlook are assessed to the downside.
  • The forecast for the price of oil for 2022 will be 102 dollars, US$92 in 2023.
  • Current account balance forecast at -0.2% of GDP in 2022; -1.5% in 2023; -1.9% in 2024; -2.1% in 2025.
  • Fuel price inflation increased by 33.3% in 2022 and fell to 0.8% in 2023.
  • Electricity inflation is forecast at 10.7% in 2022, 9% in 2023, and 10% in 2024
  • Headline inflation is forecast at 6.7% for 2022 and 5.4% for 2023, and 4.5% for 2024 and 2025
  • Core inflation is forecast at 4.3%, 5.5% in 2023, 4.8% in 2024, and 4.5% in 2025.
  • Risks related to the inflation outlook are assessed in the upward direction.
  • Local food price inflation was 8.8% in 2022, 6.2% in 2023, and 4.2% in 2024.