South Africa Leaves Monetary Policy Untouched

2026-03-26 13:11 By Luisa Carvalho 1 min. read

The South African Reserve Bank unsurprisingly held its key repo rate at 6.75% on March 26, 2026, marking a second consecutive pause, citing upside risks to the inflation outlook due to the ongoing Middle East conflict..

Policymakers noted that inflation was moving in a positive direction, matching the 3% target in February, but higher energy prices are expected to push inflation higher in the near term.

Headline inflation is projected to rise to around 4% in the second quarter, led by fuel inflation exceeding 18%, before gradually easing back to 3% by late next year under the baseline forecast.

Overall, Inflation forecasts were raised to 3.7% for 2026 (from 3.3%) and to 3.3% for 2027 (from 3.2%).

The central bank also revised its policy outlook, now projecting only one rate cut instead of two previously, while assessing two possible Iran conflict scenarios, a short-term two-month scenario and a prolonged one-year scenario, both implying the need for higher interest rates.



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South Africa Leaves Monetary Policy Untouched
The South African Reserve Bank unsurprisingly held its key repo rate at 6.75% on March 26, 2026, marking a second consecutive pause, citing upside risks to the inflation outlook due to the ongoing Middle East conflict.. Policymakers noted that inflation was moving in a positive direction, matching the 3% target in February, but higher energy prices are expected to push inflation higher in the near term. Headline inflation is projected to rise to around 4% in the second quarter, led by fuel inflation exceeding 18%, before gradually easing back to 3% by late next year under the baseline forecast. Overall, Inflation forecasts were raised to 3.7% for 2026 (from 3.3%) and to 3.3% for 2027 (from 3.2%). The central bank also revised its policy outlook, now projecting only one rate cut instead of two previously, while assessing two possible Iran conflict scenarios, a short-term two-month scenario and a prolonged one-year scenario, both implying the need for higher interest rates.
2026-03-26
South Africa Holds Key Rate at 6.75% as Forecast
The South African Reserve Bank kept its key repo rate unchanged at 6.75% on January 29, 2026, as widely expected, after a 25 bps rate cut in November. The decision was not unanimous, with two members favoring a 25-basis-point cut. Policymakers noted that, although the inflation outlook is improving, they aim for a further drop in inflation expectations and remain watchful of potential price pressures from electricity tariffs. Uncertainty in global politics also weighed. The SARB revised its inflation forecasts, lowering the 2026 estimate to 3.3% from 3.5%, while slightly raising the 2027 forecast to 3.2% from 3.1%. Governor Lesetja Kganyago said that inflation is expected to reach the new 3% target by 2028. The bank sees growth at an unchanged 1.4% this year and 1.9% next year. The SARB'S quarterly projection model continued to show gradual cuts, with the benchmark rate declining to 6.31% by end-2026 and 6.05% by the end of the next year.
2026-01-29
South Africa Trims Key Policy Rate as Expected
The South African Reserve Bank cut its key repo rate by 25 bps to 6.75% on November 20, 2025, as widely anticipated, after keeping it unchanged at 6.50% in September. The decision was unanimous, with officials agreeing that policy can now be eased amid a more favorable inflation outlook and balanced growth risks. Policymakers noted that inflation has accelerated somewhat over the past few months, reaching 3.6% for October, but they expect this to be temporary, with inflation remaining on track to meet the new 3% medium-term target. The inflation forecasts for 2025 and 2026 were slightly revised downward to 3.3% (from 3.4%) and 3.5% (from 3.6%), respectively. Regarding economic activity, the SARB raised its 2025 growth forecast to 1.3% (previously 1.2%) and maintained the 2026 projection at 1.4%. Looking ahead, the central bank noted that its Quarterly Projection Model continues to forecast gradual rate cuts as inflation subsides.
2025-11-20