South Africa’s central bank governor, Lesetja Kganyago, arrives to deliver a keynote address on monetary policy, growth and jobs at the University of the Witwatersrand in Johannesburg, South Africa, November 1, 2022. REUTERS/Siphiwe Sibeko

PRETORIA, May 25 (Reuters) – South Africa’s central bank raised its repo rate by 50 basis points (bps) to 8.25% on Thursday, as it lifted its inflation forecasts for this year and next and said risks were to the upside.

The decision was unanimous.

The South African Reserve Bank (SARB) has now raised rates for the 10th time in a row, adding a total of 475 bps to the repo rate since it began tightening policy in November 2021.

The rate increase was larger than the 25 bps increase expected by the majority of economists in a Reuters poll published last week.

The central bank of Africa’s most industrialised economy is trying to bring inflation back within its target range of 3% to 6%.

Inflation fell more than expected to 6.8% year on year in April from 7.1% in March, data showed on Wednesday.

But the bank’s updated forecasts released on Thursday showed that the SARB now expects 2023 inflation to average 6.2%, up from 6.0% previously.

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“With core goods and food higher in the near term, headline inflation for 2023 is revised up,” the SARB said in its monetary policy statement. “Given upside inflation risks, larger domestic and external financing needs, and load-shedding, further currency weakness appears likely.”

(Reporting by Anait Miridzhanian, Bhargav Acharya and Kopano Gumbi; Editing by Alexander Winning)