South Africa raises interest rates by 75 basis points, biggest hike in 20 years

By Gokhan Ergocun

ISTANBUL (AA) - The South African central bank on Thursday decided to increase its policy rate by 75 basis points to 5.5% -- the biggest hike in the last two decades.

The bank said the country's economy, which expanded by 4.9% last year, is expected to grow by 2% this year, 1.3% in 2023, and 1.5% in 2024 -- below previous forecasts.

Reminding that the fuel and food prices increased significantly in the country as in the global area, the bank increased its inflation forecast for this year from 5.9% to 6.5%.

It added: "Economic and financial conditions are expected to remain more volatile for the foreseeable future.

"In this uncertain environment, monetary policy decisions will continue to be data dependent and sensitive to the balance of risks to the outlook."

The bank has increased its policy rate by 100 basis points in September 2002.