SARB Raises Rates by 75bps to 7.00%, Alongside Expectations

South Africa Reserve Bank raises rates by 75bps to 7.00%, alongside expectations. The committee voted 3 for a 75bps rise and 2 for a 50bps rate rise at this meeting.

• SARB forecast for global growth lowered to 1.9%
• Expects SA econ to grow 1.8% this year, 0.4% in Q3 and 0.1% in Q4 largely due to record load-shedding
• Forecast takes into account lower commods prices and higher inflation, interest rates
• Incorporates assumption of increased load-shedding
• Risks to M/T growth re-assessed to the downside* Oil price forecast broadly unchanged
• C/A balance expected to fall to -1.5% in 2023 due to weaker export outlook
• Near-term fiscal risk has eased after higher tax revenues, but weaker commodity prices could increase risk
• Bank to take a data dependent approach to policy