By Gabriele Steinhauser
JOHANNESBURG--The South African Reserve Bank on Thursday raised its main repo rate to 7% from 6.25% in an effort to keep inflation in check amid a weaker currency and high food and fuel prices.
The repo rate is now higher than it was before the start of the coronavirus pandemic, when the bank sharply reduced rates to support the economy.
The SARB also revised down its economic growth forecasts for the current and coming years, citing a sharp increase in rolling electricity blackouts in South Africa.
The bank now expects Africa's most developed economy to grow 1.8% this year, down from its September forecast of a 1.9% expansion. The growth forecast for 2023 was cut to 1.1% from 1.4%, with SARB Governor Lesetja Kganyago saying that worsening electricity blackouts could reduce growth by as much as 0.6% next year. In 2024, the SARB expects growth of 1.4%, down from 1.7% forecast in September.
Breakdowns of South Africa's aging coal power plants and lack of money to buy diesel for emergency generators have led to rolling nationwide blackouts of up to 10 hours a day.
Write to Gabriele Steinhauser at firstname.lastname@example.org
(END) Dow Jones Newswires