Business Report:

The South African Reserve Bank has hiked the repo rate by 50 basis points to 12 percent, the bank’s governor Tito Mboweni said on Thursday following a Monetary Policy Committee meeting.

This raised the prime rate that banks charge their clients to 15.5 percent.

Mboweni had last month threatened a 200 basis points increase due to the country’s high inflation figures.

Most economists had forecast a 100 basis points rise in the repo rate.

All 22 economists polled by Reuters predicted the repo rate would rise, with 18 forecasting a 100 basis point increase.

The remainder stuck to forecasting a 50 basis point hike.

Inflation, pushed by the soaring cost of both fuel and food, is well out of the bank’s inflation targetting range of 3-6 percent.

CPIX for April rose to 10.4 percent from 10.1 percent in March, according to Statistics SA. – Sapa
Published on the web by Business Report on June 12, 2008