South Africa's central bank raised its key interest rate to 5.5 percent on Wednesday as concerns grew over its weakening currency amid an emerging market rout.
The bank hiked its key interest rate - the rate at which it lends to commercial banks - 50 basis points (bps) to 5.5 percent. The South African rand extended losses against the dollar, falling to a five year low of around 11.26 after the surprise move.
South African Reserve Bank (SARB) Governor Gill Marcus said the bank's monetary policy committee had carefully considered South Africa's slowing economic growth on the one hand, and rising inflation outlook and depreciating currency before it decided to increase the rate.
She said the bank would continue to monitor the situation closely and said she had not been influenced by a similar move in Turkey.
There had been speculation that the bank could be the next to hike interest rates, although analysts told CNBC they were skeptical the bank would act just now.
Central banks in Turkey and India have already hiked rates to protect their currencies from sharp losses. Worries over China's growth and ongoing concerns over further tapering by the Federal Reserve prompted the selloff, which started last week.