Economy / General

MPC Commentary

The Monetary Policy Committee (MPC) decided to increase the repo rate by 25 basis points to 4.25%, marking the third consecutive 25 basis point increase since the low of 3.5%. The decision was split among the MPC members with three members preferring the 25 basis point increase and two motivating that a 50 basis point increase would be more appropriate.

Higher cost outlook for agriculture as the SARB lifts interest rates for the second time in 2022

The South African Reserve Bank’s (SARB’s) continued its monetary policy normalisation with a further hike of 25 basis points, the second for 2022, which brought the repurchase rate to 4.25% effective from the 25th of March 2022. Elevated global and domestic risks to the inflation outlook with the Russia-Ukraine war adding fuel to the fire underpinned the upside move in interest rates.

CPI for February 2022

Consumer price inflation increased by 5.7% year-on-year in February 2022, which matched the increase recorded the previous month and means that inflation remains within the target band, but above the midpoint of the band since May 2021. Month-on-month inflation increased by 0.6%, which was up from the 0.2% increase the previous month.

EM (& SA) inflation: Higher, more entrenched