Story perspectives

SARB Holds Steady at 7% Amid Inflation Concerns

9/20/2025

Summary

SARB Maintains Rates

On September 18, 2025, the South African Reserve Bank (SARB) held the repo rate steady at 7%.
The decision resulted from a split vote: four members favored no change, while two proposed a 25-basis-point cut.
SARB Governor Lesetja Kganyago noted a recent rise in headline inflation, projected to peak around 4%, while core inflation remains stable at 3%.
Modest economic growth is anticipated, contingent on increased investment levels.
Inflation and growth forecast risks are viewed as balanced.

Summary

Rand Stabilizes Amid Rates

The South African rand stabilized after the Reserve Bank maintained interest rates at 7%.
Analysts expected a rate cut due to a slowdown in August's headline inflation.
Trade Minister Parks Tau met with U.S. Trade Representative Jamieson Greer, discussing concerns over a 30% tariff on South African imports.
This tariff may result in significant job losses in South Africa, the highest in Sub-Saharan Africa.
Key economic indicators, including business cycle leading indicators and producer inflation data, are due next week.

History

Historical Context

In 1996, South Africa established the South African Reserve Bank as an independent entity to stabilize its economy following the end of apartheid. This independence facilitated effective monetary policy, as seen in the 2025 decision to set the repo rate at 7%. Current inflation concerns echo the volatile rates of the 1990s, highlighting ongoing challenges in balancing economic growth and inflation management.

1 of 3

SARB Maintains Rates

On September 18, 2025, the South African Reserve Bank (SARB) held the repo rate steady at 7%.
The decision resulted from a split vote: four members favored no change, while two proposed a 25-basis-point cut.
SARB Governor Lesetja Kganyago noted a recent rise in headline inflation, projected to peak around 4%, while core inflation remains stable at 3%.
Modest economic growth is anticipated, contingent on increased investment levels.
Inflation and growth forecast risks are viewed as balanced.

1 / 3