SARB holds key rate to assess impact of earlier cuts
South Africa's central bank left its key lending rate at 7% in a tight decision, holding off from easing monetary policy further while it assesses the impact of previous rate cuts.
Thursday's policy announcement was the first since the South African Reserve Bank (SARB) said it would aim for the bottom of its 3% to 6% inflation target range rather than the middle, an effort to lock in low inflation.
The Monetary Policy Committee was split, with four members preferring no change in the repo rate and two favouring a 25 basis point cut.
SARB Governor Lesetja Kganyago said the effects of 125 basis points of rate cuts since September 2024 were still filtering through in Africa's biggest economy.
"We want to see how this is affecting the economy, how expectations evolve, and how inflation risks are resolved," Kganyago told a press conference.
Economists polled by Reuters had expected a close call on Thursday after annual inflation unexpectedly slowed in August, falling to 3.3% from July's 3.5% reading.
Well-contained inflation has allowed the SARB to cut its repo rate three times this year, including at its last meeting in July.
Since then, U.S. President Donald Trump imposed a steep 30% tariff on South African goods, but the full effects are yet to be felt.
The central bank has said U.S. tariffs could cause tens of thousands of job losses in South Africa, though it thinks the overall impact on local inflation and economic growth could be modest.
On Thursday the bank said it now expects inflation to average 3.4% this year, marginally higher than a July forecast of 3.3%.
It raised its economic growth forecast for this year to 1.2% from 0.9%, reflecting a better-than-expected performance in the second quarter.
Comments
Research Reports
Projects
Latest Multimedia
Latest News
Showroom
AxFlow AQS Liquid Transfer (Pty) Ltd is an Importer and Distributor of Pumps in Southern Africa
VISIT SHOWROOM
Electrifying the world in a safe, smart, and sustainable way, ABB Electrification is a global technology leader in electrical distribution and...
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
