Bottom Line:

Consistent with expectations, the SARB increased the Repo Rate by 50bps to a 2009-high of 8.25%. Notably, the decision was unanimous, marking the first time since the bank started raising rates in November 2021 that the MPC was in total agreement. The accompanying statement suggested that the 50bp rate hike was a result of upside risks to the inflation outlook and concerns over the risk of ZAR-weakening capital outflows. It will go a long way in affirming the SARB’s commitment to reining in inflation and inflation expectations, but may not be enough to end the recent run on the ZAR.

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