The repurchase rate (repo rate) in South Africa reached 7% after the SA Reserve Bank's (SARB) Monetary Policy Committee (MPC) agreed to a 75 basis points hike.

The increase means that the repo rate will now be 7% per year from 25 November 2022, with prime now at 10.5%.

The development was on Thursday announced by SARB Governor Lesetja Kganyago during a press briefing.

Addressing media, the Governor said three members of the MPC preferred the announced increase.

"Two member preferred a 50% basis points increase," he said.

The level of the repurchase rate is now above the level prevailing before the start of the pandemic.

The MPC made the decision during its meeting on Wednesday. This was the sixth consecutive increment following two 25 basis points hike in November and in January. The repo rate was hiked by 50 basis points at the May meeting. In July and September, the MPC upped the ante, announcing 75 basis point rises.

"The revised repurchase rate remains supportive of credit demand in the near term, while raising rates to levels more consistent with the current view of inflation and risks to it.

"The aim of policy is to anchor inflation expectations more firmly around the mid-point of the target band and to increase confidence of attaining the inflation target sustainably over time," he said.

The Governor said local food price inflation was revised up due to the weaker exchange rate and was now expected to be 8.8% in 2022.

"Food inflation is revised higher to 6.2% in 2023 and unchanged at 4.2% in 2024. In 2024 and 2025 we expect headline inflation of 4.5%," he said.

The Bank's forecast of headline inflation for this year and next is slightly higher at 6.7% and 5.4%, respectively.