{"id":851330,"date":"2026-02-18T11:19:05","date_gmt":"2026-02-18T09:19:05","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=851330"},"modified":"2026-02-18T11:29:49","modified_gmt":"2026-02-18T09:29:49","slug":"great-news-about-interest-rate-cuts-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/851330\/great-news-about-interest-rate-cuts-in-south-africa\/","title":{"rendered":"Great news about interest rate cuts in South Africa"},"content":{"rendered":"\n

South Africa’s consumer inflation has dipped to 3.5% in January 2026, down from the 3.6% recorded in December.<\/p>\n\n\n\n

This lends credence to the South African Reserve Bank’s (SARB) view that inflation has peaked in South Africa and that the country will now gradually move towards the new 3.0% target.<\/p>\n\n\n\n

It also means conditions are supportive of interest rate cuts continuing, with 75 basis points of cuts expected in 2026 and even more through 2027 and 2028.<\/p>\n\n\n\n

According to the latest data from Stats SA, the CPI rose to 3.5% in January, driven by stable food inflation and lower fuel prices. T<\/p>\n\n\n\n

The monthly change in CPI was 0.2%, the same as December\u2019s reading. Food inflation\u2014one of the biggest drivers of inflation\u2014remained flat at 4.4% for a third consecutive month. <\/p>\n\n\n\n

The annual rate for cereal products slowed significantly in January, declining to 0.6% from 2.1% in December. <\/p>\n\n\n\n

White rice recorded a rate of -11.0%, representing an eleventh consecutive month of deflation. Maize meal inflation declined notably from 9.5% in December to 2.6% in January.<\/p>\n\n\n\n

The rate for oils & fats softened to 4.0% from 4.6% in December. Olive oil is 7.9% and butter 0.7% cheaper than a year ago.<\/p>\n\n\n\n

The milk, other dairy products & eggs category registered -0.5%, higher than December\u2019s -1.1%. Fresh full-cream milk (-1.4%), fresh low-fat milk (-1.6%) and eggs (-7.6%) contributed to the deflationary trend.<\/p>\n\n\n\n

Eggs are becoming more affordable. The average price for a tray of six eggs was R22.90 in January, down from R24.51 in January 2025 and well below the peak of R25.85 recorded in December 2023.<\/p>\n\n\n\n

However, meat prices continue to bring pressure to the basket, with another month of double-digit increases. Meat prices are rising due to the Foot and Mouth Disease outbreak.<\/p>\n\n\n\n

The annual rate for meat accelerated further to 13.5% from December\u2019s 12.6%. This is the highest print for the category since December 2017 (13.9%).<\/p>\n\n\n\n

Three beef products recorded the highest annual rates of all 391 products in the CPI basket. <\/p>\n\n\n\n

These were beef steak (31.2%), stewing beef (30.3%) and beef mince (28.0%). More affordable beef products were not immune to sharper price increases, with the rate for beef offal accelerating to 17.2% from 10.5% in December. Pork also rose significantly, to 19.5% from 11.5%.<\/p>\n\n\n\n

The fuel index decreased by 3.7% in the 12 months to January. The monthly change for petrol was -3.1%, and for diesel, -5.4%.<\/p>\n\n\n\n

The price of inland 95-octane petrol was R20.75 per litre in January, the lowest in almost four years, that is since February 2022 (R20.14).<\/p>\n\n\n\n

Interest rate cuts to follow<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

The drop in inflation, even if slight, is a positive signal for the South African Reserve Bank and likely to feed into a more dovish stance on interest rates.<\/p>\n\n\n\n

At the central bank’s first meeting for the year, the Monetary Policy Committee (MPC) voted four to two to keep interest rates on hold.<\/p>\n\n\n\n

Two members of the committee wanted a 25 basis-point cut, but the overall messaging was to take a ‘wait-and-see’ approach to assess the impact of previous cuts and keep an eye on inflation.<\/p>\n\n\n\n

Reserve Bank Governor Lesetja Kganyago noted that inflation risks around the Foot and Mouth Disease outbreak were a significant concern.<\/p>\n\n\n\n

He also flagged the coming electricity price increases from Eskom, which will hit households in April and July 2026.<\/p>\n\n\n\n

However, he was confident that, despite these risks, inflation had peaked in December at 3.6%. The latest data confirms this view, at least for January.<\/p>\n\n\n\n

Given this confirmation, the expectation among most economists that the SARB will cut interest rates in March 2026 is also gaining support.<\/p>\n\n\n\n

Economists anticipate that the SARB will cut rates at least two more times in 2026, at 25 basis points each, with a possibility of another 25 basis point cut if the inflation trajectory holds.<\/p>\n\n\n\n

As South Africa moves towards and stabilises around the 3.0% inflation target\u2014which is likely to happen sooner than anticipated\u2014more cuts could follow.<\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa’s consumer inflation has dipped to 3.5% in January 2026, supporting the SARB’s view that inflation peaked in December, opening the way for interest rate cuts.<\/p>\n","protected":false},"author":10,"featured_media":553894,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[7530,3619,1809],"class_list":["post-851330","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-inflation","tag-sarb","tag-stats-sa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/851330","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=851330"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/851330\/revisions"}],"predecessor-version":[{"id":851340,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/851330\/revisions\/851340"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/553894"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=851330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=851330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=851330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}