Central bank chiefs, faced with stubbornly high inflation, have raised South African interest rates for the fourth time this year.

The country's Reserve Bank has raised rates by one percentage point to 13.5%.

The move, which takes the rise in South African rates this year to four percentage points, followed data showing that prices have continued to soar.

The country's inflation index rose in July at an annual rate of 9.9%, the biggest on record, and well outside the 3-6% range set for the Reserve Bank.

'Risks severe'

Bank governor Tito Mboweni warned of further rate rises if inflation remained high.

"If the inflation picture going forward doesn't seem to be improving, this matter will have to confront us again," Mr Mboweni said.

The comments failed to impress many economists, who warned that the rise would raise borrowing costs and, by boosting the rand, hit exporters.

"The risks to the economy are very severe," Absa economist Chris Hart said.

"With the global economy weakening, our export growth is not going to be great and that is going to dampen demand."

The rand, which plunged by 37% against the US dollar late last year, ended 16 cents higher at 10.45 rand to $1.

And, against a backdrop of disappointing data, the rate rise helped send South African shares 1.5% lower by close of trading on Thursday.

" We've been hit by big events today - Tito, Alan Greenspan, George Bush," said Andile Mazwai, of Mazwai Securities.

Economic growth

But with South Africa's economic growth hitting 3.1% in the April to June quarter, compared with 2.2% in the first three months of the year, Mr Mboweni dismissed fears that higher rates would hit output.

"The level of interest rates cannot be regarded as a major factor which has had or will have a significant constraining effect on production growth," he said.