South Africa Raises Key Rate to 6.75% to Counter Rand Slump
- Currency has slumped 15% against dollar since last MPC meeting
- Inflation pressures building as drought boosts food costs
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South Africa’s central bank ramped up its policy tightening by raising the benchmark rate by half a percentage point, worried that inflation pressures from a weaker rand will spread more broadly in the economy.
The repurchase rate was increased to 6.75 percent, Governor Lesetja Kganyago said in a speech Thursday in the capital, Pretoria. That was in line with the forecasts of 17 of the 26 economists surveyed by Bloomberg. Six had predicted a 25 basis-point increase.