SARB holds rates at 6.75% to anchor inflation target

Some economists believe the Reserve Bank’s Monetary Policy Committee is likely to stay cautious in its upcoming meetings amid persistent global risks.

The MPC signalled its caution on Thursday during its first announcement on policy rates for the year.

Four MPC members voted to hold the benchmark rate at 6-point-75 percent, with commercial banks holding the prime lending rate at the current 10-point-25 percent.

The MPC already lowered the repo rate from 8-point-25 percent at the start of 2024 to 6-point-75 percent by the end of last year. 

The Reserve Bank’s quarterly projection model continues to forecast gradual rate cuts as inflation subsides. 

The central bank has a pair of scenarios, a favourable one where the rand is stronger, and the oil price keeps falling, and a more challenging one where the rand weakens, and oil goes up again.

Economist at Sanlam Investments, Patrick Buthelezi, said that the thinking behind another rate cut is not clear-cut.

“Overall, we expect the sap to navigate this uncertain environment cautiously.”

Economists at FNB believe the country is still set for a better 2026 even as the rate cut is delayed.