WATCH: SARB hikes interest rate on back of higher inflation

Ask AI 2 min South African Reserve Bank Governor Governor Lesetja Kganyago has announced a 25 basis point rate hike.

South African Reserve Bank (SARB) governor Lesetja Kganyago this afternoon announced that the prime lending rate would increase by 0.25 percentage points given the upside to inflation.

This morning, Statistics South Africa said inflation had moved to 4.4% in August from 4.3% the prior month.

In announcing the hike, the governor noted that oil had again gone up, with the country running an under recovery, while headline inflation was likely to hit 5% before slowing to 3% at the end of 2027.

Kganyago also said annual growth is projected at 1.2% this year, improving over the medium term. However, the governor warned that growth risks were skewed to the downside.