{"id":867253,"date":"2026-07-23T15:13:20","date_gmt":"2026-07-23T13:13:20","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=867253"},"modified":"2026-07-23T15:25:00","modified_gmt":"2026-07-23T13:25:00","slug":"reserve-bank-holds-interest-rates-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/867253\/reserve-bank-holds-interest-rates-in-south-africa\/","title":{"rendered":"Reserve Bank holds interest rates in South Africa"},"content":{"rendered":"\n

The South African Reserve Bank’s (SARB’s) Monetary Policy Committee (MPC) has voted to hold interest rates in South Africa.<\/p>\n\n\n\n

This keeps the country’s repo rate at 7.00%, with the prime rate rising to 10.50%.<\/p>\n\n\n\n

The MPC voted 4-2 in favour of the hold, with the minority favouring a 25 bps hike.<\/p>\n\n\n\n

While economists and markets had expected a hike, this was a late shift in views following the collapse of a ceasefire between the United States and Iran earlier in the month, and higher-than-expected inflation readings.<\/p>\n\n\n\n

However, Reserve Bank governor Lesetja Kganyago noted that, while inflation is higher and risks remain, other economic data is pointing to a more contained situation for South Africa.<\/p>\n\n\n\n

“The committee agreed that the outlook is uncertain, and with the rate increase at our previous meeting, the policy stance is appropriate for now, with rates somewhat restrictive,” he said.<\/p>\n\n\n\n

Global markets had been thrust into chaos and uncertainty when the United States launched attacks on Iran at the end of February 2026.<\/p>\n\n\n\n

The sudden and unexpected onset of war in the Middle East caused the SARB to halt its rate-cutting cycle in March and pushed it to hike rates in May as global oil prices rocketed to $120 a barrel.<\/p>\n\n\n\n

The war shut down the Strait of Hormuz, a critical channel through which about 20% of the world\u2019s oil is transported.<\/p>\n\n\n\n

The oil price shock and its impact on energy and fuel prices persisted until June, when the US and Iran signed a memorandum of understanding to open the Strait and negotiate a long-term peace agreement.<\/p>\n\n\n\n

However, the ceasefire collapsed soon after, with the United States restarting its attacks and the Strait once again shutting down.<\/p>\n\n\n\n

According to Kganyago, the reignition of the war has increased inflation risks, but these have so far been contained to fuel-related pricing.<\/p>\n\n\n\n

June’s CPI reading, which came in at a surprising 5% year-on-year, was above economists’ expectations and was driven by fuel and transport.<\/p>\n\n\n\n

Consumer goods and services, meanwhile, appeared contained.<\/p>\n\n\n\n

Inflation expectations\u2014a survey of where businesses, consumers and industry anticipate inflation to go\u2014have also moved higher and further outside the SARB’s 3% target.<\/p>\n\n\n\n

However, this was not unexpected, and the changes are larger in the near term than in the longer term.<\/p>\n\n\n\n

Contrasting the inflation negatives, South Africa’s economic growth beat expectations. While it remains muted, driven by exports rather than local demand, prospects are more positive, the governor noted.<\/p>\n\n\n\n

Kganyago said the MPC believes the country can continue to show good growth, particularly in the second half of the year, though it will be slower than the positive start to year.<\/p>\n\n\n\n

He also warned that downside risks are mounting\u2014particularly with inflation.<\/p>\n\n\n\n

“The inflation outlook has improved slightly since out last meeting, but inflation remains too high, while our growth is still weak,” Kganyago said.<\/p>\n\n\n\n

Despite this, he said the MPC was cognisant that South Africa’s growth prospects will be driven mainly by domestic reforms, like fixing local government and improving productivity.<\/p>\n\n\n\n

“Our main contribution is to stabilise inflation with our 3% target over time, and the MPC will act as needed to achieve that,” he said.<\/p>\n\n\n\n

The next MPC meeting will be held in September, with the next interest rate announcement scheduled for Wednesday, 23 September 2026.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"

The Reserve Bank’s Monetary Policy Committee has voted to hold interest rates in South Africa.<\/p>\n","protected":false},"author":10,"featured_media":828563,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2080280277994054014","_sma_x_attempts":1,"footnotes":""},"categories":[11121],"tags":[10315,11019,3619],"class_list":["post-867253","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-interest-rate","tag-mpc","tag-sarb"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/867253","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=867253"}],"version-history":[{"count":9,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/867253\/revisions"}],"predecessor-version":[{"id":867273,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/867253\/revisions\/867273"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/828563"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=867253"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=867253"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=867253"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}