Sarb Hikes Rates Amid Oil Price Pressure and Middle East Tensions

The South African Reserve Bank (Sarb) has raised its key policy rate by 25 basis points to combat inflationary pressure, particularly from higher oil and fuel prices. The decision was made by the Monetary Policy Committee, chaired by governor Lesetja Kganyago, which took a unanimous vote.

Since the MPC's July meeting this year, tensions in the Middle East have escalated, contributing to increased oil prices and a more uncertain global economic outlook. The Sarb aims to bring inflation back towards its 3% target with this latest decision.

The key policy rate has been raised from 7% to 7.25%, while the prime lending rate is now at 10.75%. This move comes as there is just one interest-rate announcement remaining for the year.