Reserve Bank's MPC adopts cautious stance on interest rates

The Reserve Bank's Monetary Policy Committee (MPC) has taken a cautious approach to rates after making the first pause since the July meeting. 

The central bank's MPC held the repo rate at 7 percent in its latest decision announced on Thursday.

While this is in line with market expectations, the split in votes signals a tougher call for the MPC this time around. 

Four members voted for a pause, with two others voting for another cut. 

Since September last year, the Reserve Bank's benchmark rate has been reduced by 125 basis points, including the cut seen in July. 

READ: Reserve Bank holds repo rate at 7%

Reserve Bank governor Lesetja Kganyago said the central bank now wants to see how this is affecting the economy, how expectations evolve and how inflation risks are resolved. 

"The forecast has rates easing gradually as inflation returns to the bottom end of the 3-6% target range. The MPC emphasises that stabilising inflation at 3%, rather than 4.5%, implies a lower longer-term level for the policy rate."

Kganyago said the global economy remains resilient despite ongoing geopolitical tensions and trade disruptions. 

But longer-term interest rates have risen in several major economies, reflecting pressures from high and rising debt levels and persistent inflation risks.