The South African Reserve bank SARB raised its main policy rate by 25 basis points to 7 on Thursday, saying inflation risks stemming from higher oil prices had intensified and the challenge of large and overlapping shocks would likely trigger second round effects.
SARB governor Lesetja Kganyago said hopes for a quick end to the Middle East crisis which has strangled the flow of oil through the Strait of Hormuz had faded since the previous meeting of the monetary policy committee MPC in March.
Oil prices have fluctuated around 100 per barrel. In this context, global growth forecasts have been marked down, while inflation forecasts have been revised higher, Kganyago told a media conference.
