Cape Town — South Africa's central bank has again increased interest rates in its fight against inflation.
The deputy governor of the SA Reserve Bank, Xolile Guma, announced on Thursday that the bank's monetary policy committee had decided to raise the bank's key "repo" rate - the rate at which it lends money to commercial banks - by half a percentage point to 10 percent.
Presenting the decision in a nationally-televised news conference from Pretoria, Guma noted that inflation had increased at the rate of 6.4 percent in the year ended June due to the rising costs of food and energy.
Guma also presented statistics showing that South African consumers, whose confidence in the economy remains near record levels, are still spending too much. The bank is trying to put pressure on South Africans to increase their savings, and to cut inflation back to within a target range of three to six percent a year.
He noted that volatile financial markets in developed economies were affecting emerging markets, including South Africa. While a number of the world's central banks had responded by injecting liquidity into their banking systems, "the focus of the SA Reserve Bank remains to ensure a return of the inflation rate to within the target range."
"At this stage," Guma added, "there is no evidence that the recent turbulence... will have marked effects on the domestic growth outlook, although this will depend to some extent on the impact of these developments on... U.S. growth performance."
Full text of bank statement:
