SARB cites positive inflation outlook as reason for keeping interest rate unchanged
The country's central bank announced its interest rate decision on Wednesday afternoon, making this the fifth hold since May last year.
A YouTube screengrab of SA Reserve Bank Governor Lesetja Kganyago delivering the Monetary Policy Committee’s January statement on 25 January 2024.
JOHANNESBURG - The South African Reserve Bank (SARB) has cited a positive inflation outlook as the reason to keep interest rates unchanged at 8.25%.
The country's central bank announced its interest rate decision on Wednesday afternoon, making this the fifth hold since May last year.
This decision is similar to the US Federal Reserve Bank, which also announced interest rates would remain unchanged at its meeting this month.
Despite a jump in the Consumer Price Index from 5.3% in January to 5.6% last month, the SARB has once again kept the repo rate unchanged.
It said that while the rand had been relatively weaker compared to the dollar and inflation remained close to the 6% mark, the country was still making headway in returning inflation to 4.5%.
However, Reserve Bank Governor Lesetja Kganyago said it would be later than expected.
"We still see headline inflation heading back to 4.5%. However, given extra inflation pressure, headline now reaches the target midpoint only at the end of 2025, later than previously expected."
Wednesday afternoon's rate decision was in line with predictions made by economists.
The reserve bank is only expected to start its rate-cutting cycle in the third quarter of the year.