Reserve Bank keeps repo rate steady in split decision
South Africa's central bank kept its main lending rate unchanged at 6.75% on Thursday, saying it wanted to see inflation expectations fall further and citing potential price pressures including electricity tariffs.
The majority of economists polled by Reuters had expected no change in the repo rate.
Central bank Governor Lesetja Kganyago told a press conference that four members of the bank's Monetary Policy Committee (MPC) preferred to keep the repo rate steady, while two favoured a 25-basis-point cut.
"We look forward to (inflation) expectations declining further as South Africans experience ongoing lower inflation," Kganyago said.
South Africa's headline inflation rate inched up to 3.6% in December from November, above the bank's 3% target but staying within its one-percentage-point tolerance band.
Kganyago said on Thursday that bank officials thought December's inflation reading would be the peak and inflation would slow from there.
But he said the MPC was concerned about electricity prices, given the energy regulator has admitted errors in its previous calculations which are expected to result in steeper tariff hikes than previously announced.
Kganyago also stressed elevated uncertainties from global trade tensions and jittery financial markets.
The central bank tweaked its inflation forecasts for this year and next, now seeing headline inflation averaging 3.3% in 2026 and 3.2% in 2027, compared to 3.5% and 3.1% previously.
It kept its economic growth forecasts for this year and next unchanged, at 1.4% for 2026 and 1.9% for 2027.
Article Enquiry
Email Article
Save Article
Feedback
To advertise email advertising@creamermedia.co.za or click here
Comments
Projects
Latest Multimedia
Latest News
Showroom
M and J Mining are leading suppliers of physical support systems as used by the underground mining industry. Our selection of products are not...
VISIT SHOWROOM
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
