Skip to content

Price Shock May Spur Biggest South African Rate Hike Since 2002

  • Inflation rate at five-year high of 6.5% breaches target band
  • Traders see at least one 75 basis point rate hike this year
Workers refuel vehicles at a gas station in Cape Town, South Africa.

Workers refuel vehicles at a gas station in Cape Town, South Africa.

Photographer: Dwayne Senior/Bloomberg
Updated on

South African inflation surged above the central bank’s target range for the first time in more than five years, raising the prospect of policy makers raising borrowing costs by the biggest margin in almost two decades this year.   

Annual inflation accelerated to 6.5% in May, from 5.9% a month prior, Statistics South Africa said in a statement on its website on Wednesday. That’s the highest level since January 2017. The median of 11 economists’ estimates in a Bloomberg survey was 6.1%.