In the second quarter of this year, headline inflation breached the target range and is expected to remain above it until the second quarter of 2023. By the fourth quarter of 2024, headline inflation is expected to revert to the mid-point of the target range, on the back of declining fuel and food inflation. The forecast takes into account the policy rate trajectory indicated by the Bank’s Quarterly Projection Model (QPM). As usual, the repo rate projection from the QPM remains a broad policy guide, changing from meeting to meeting in response to new data and risks. Against this backdrop, the MPC decided to increase the repurchase rate by 75 basis points to 5.50% per year, with effect from 22 July 2022.
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