South Africa Seen Avoiding ‘Particularly High Rates’ in Price Shock
- Domestic inflation rate is below that of many advanced markets
- South Africa raised rates by 200 basis points since November
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The South African central bank’s proactive efforts to contain price growth mean the country has a good chance of getting through the worst global inflation shock in a generation “without particularly high inflation or high interest rates,” Deputy Governor Fundi Tshazibana said.
Policy makers began a pre-emptive hiking cycle in November and has since lifted the benchmark rate by 200 basis points to 5.5%, unwinding some of 2020’s pandemic-era stimulus. Its stance has repeatedly drawn criticism from some politicians and labor unions who’ve urged the central bank to do more to support cash-strapped South Africans and the domestic economy.