Why higher repo rates are good for inflation
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The South African Reserve Bank raised its benchmark repo rate by another 25 bps to 4.25% at its March 2022 meeting, as widely expected.
This is the third consecutive hike due to increased inflation risks stemming from the war in Ukraine.
Policymakers said that the overall risks to the medium-term growth outlook are assessed to be balanced, while the risks to the inflation outlook are assessed to the upside
WR Van Der Merwe explains the theory of why increased repo rates can lead to lower inflation in an economy.
Image: Karolina Grabowska from Pexels
This is the third consecutive hike due to increased inflation risks stemming from the war in Ukraine.
Policymakers said that the overall risks to the medium-term growth outlook are assessed to be balanced, while the risks to the inflation outlook are assessed to the upside
WR Van Der Merwe explains the theory of why increased repo rates can lead to lower inflation in an economy.
Image: Karolina Grabowska from Pexels
