South African Reserve Bank Maintains Interest Rate Amid Inflation Concerns

On January 29, 2026, the South African Reserve Bank (SARB) announced that it would keep its key repo rate unchanged at 6.75%. This decision was anticipated by a majority of economists, with 18 out of 26 analysts polled by Reuters expecting no change. The prime lending rate remains at 10.25%. The Monetary Policy Committee (MPC) voted with four members in favor of maintaining the rate and two members advocating for a 25-basis-point cut.

Interest rate cut possible if Rand continues to strengthen and oil prices drop: SARB – Channel AfricaSARB likely to keep repo rate unchanged – Channel AfricaEconomists predict no change as SARB set to announce interest rate decisionSA keeps repo rate unchanged at 6.75%SA Reserve Bank to announce first repo rate decision for 2026WATCH: Interest rate remains unchangedReserve Bank’s MPC to deliver interest rate decisionConsumers will be left to struggle a little longer as interest rate predicted to remain unchangedSouth Africa Holds Key Rate at 6.75% as Forecast

SARB Governor Lesetja Kganyago highlighted that the decision was influenced by a balanced assessment of inflation risks. The bank revised its inflation forecasts, lowering the 2026 estimate to 3.3% from 3.5%, while slightly increasing the 2027 forecast to 3.2% from 3.1%. Despite a slight uptick in annual consumer inflation to 3.6% in December 2025, the central bank remains optimistic about a gradual decline in inflation, which is crucial for future monetary policy decisions.

South Africa interest rates stay on hold as inflation outlook improvesSouth Africa Holds Key Rate at 6.75% as ForecastSARB keeps repo rate unchanged at 6.75%WATCH: Interest rate remains unchangedInterest rate cut possible if Rand continues to strengthen and oil prices drop: SARB – Channel AfricaInterest rates unchanged despite inflation outlook improvingMonetary Policy Committee maintains interest rates amid falling inflation expectationsReserve Bank’s MPC to deliver interest rate decision

Despite the SARB's cautious stance, there are growing calls for interest rate cuts from various sectors. The Congress of South African Trade Unions (Cosatu) has urged the bank to reduce the repo rate by at least 25 basis points to alleviate financial pressure on consumers facing rising living costs. Real estate groups, such as Seeff, have also advocated for rate cuts, suggesting that lower borrowing costs could stimulate economic growth and improve affordability in the property market.

Reserve Bank’s MPC to deliver interest rate decision

Governor Kganyago emphasized the importance of monitoring inflation trends closely, stating, “We look forward to expectations declining further, as South Africans experience ongoing lower inflation.” He acknowledged the global economic uncertainties and geopolitical tensions that continue to impact financial markets. The SARB's approach will remain cautious, with decisions made on a meeting-by-meeting basis, depending on incoming economic data.

South Africa interest rates stay on hold as inflation outlook improves

While the SARB's decision aligns with market expectations, some analysts believe that further rate cuts may be necessary later in the year, particularly if inflation falls below 3%. However, the current economic landscape remains challenging, with many households struggling under high debt levels and rising costs for essentials like food and utilities. Neil Roets, CEO of Debt Rescue, noted that many South Africans are increasingly reliant on credit to meet basic needs, indicating a deeper financial distress.

Consumers will be left to struggle a little longer as interest rate predicted to remain unchanged

The SARB's decision to maintain the repo rate at 6.75% reflects a cautious approach amid improving inflation expectations and ongoing economic pressures. As the central bank navigates a complex landscape of domestic and global challenges, future rate adjustments will depend on sustained improvements in inflation and economic growth indicators.

Reserve Bank’s MPC to deliver interest rate decision