Reaction to Reserve Bank interest rate decision

The South African Reserve Bank's Monetary Policy Committee has decided to increase rates by a quarter of a per cent, which takes the policy rate to 7 per cent and the prime lending rate to 10.5 per cent. The bank has cited upward inflation risks emanating from the ongoing war in the Middle East, which has pushed up oil prices and resulted in significantly higher fuel prices in South Africa. Inflation rose rapidly from 3.1 per cent in March to 4 per cent in April. The bank expects inflation to average 4.4 per cent this year amid rising prices.

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