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SOUTH AFRICA: SARB Stands Pat On Rates, S. Africa Observes Public Holiday

SOUTH AFRICA
EM BulletBulletEmerging Market News
  • The South African Reserve Bank (SARB) kept the repo rate unchanged at 7.50%, as expected by most economists, with Governor Lesetja Kganyago pointing to elevated risks "extreme levels of uncertainty". The decision was supported by a majority of four members, while two voted for a 25bp cut. The inflation forecast was nudged lower to +3.6% Y/Y this year (versus +3.9% in January) and to +4.5% Y/Y in 2025 (versus +4.6% in January). Core inflation projection was lowered by 0.1pp for this year but revised slightly higher for 2026 and 2027. Policymakers said that confidence in the latest forecast was not high, given the elevated level of uncertainty.
  • The Democratic Alliance (DA) called for a review of foreign policies and the appointment of ambassadors at cabinet level (it is now a presidential prerogative), arguing that the African National Congress (ANC) should consult with its coalition partners. This comes amid continued tensions with the US. Presidency spokesperson Vincent Magwenya dismissed the suggestion, but it indicates that the DA may be seeking more areas where it could push for collective decision making at the expense of the ANC's discretion. The party confirmed that reiterating that "the ANC (...) no longer enjoy an outright majority and are no longer at liberty to single-handedly determine South Africa's foreign policy agenda".
  • South Africa observes a national holiday (Human Rights Day), with local markets shut as a result.
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  • The South African Reserve Bank (SARB) kept the repo rate unchanged at 7.50%, as expected by most economists, with Governor Lesetja Kganyago pointing to elevated risks "extreme levels of uncertainty". The decision was supported by a majority of four members, while two voted for a 25bp cut. The inflation forecast was nudged lower to +3.6% Y/Y this year (versus +3.9% in January) and to +4.5% Y/Y in 2025 (versus +4.6% in January). Core inflation projection was lowered by 0.1pp for this year but revised slightly higher for 2026 and 2027. Policymakers said that confidence in the latest forecast was not high, given the elevated level of uncertainty.
  • The Democratic Alliance (DA) called for a review of foreign policies and the appointment of ambassadors at cabinet level (it is now a presidential prerogative), arguing that the African National Congress (ANC) should consult with its coalition partners. This comes amid continued tensions with the US. Presidency spokesperson Vincent Magwenya dismissed the suggestion, but it indicates that the DA may be seeking more areas where it could push for collective decision making at the expense of the ANC's discretion. The party confirmed that reiterating that "the ANC (...) no longer enjoy an outright majority and are no longer at liberty to single-handedly determine South Africa's foreign policy agenda".
  • South Africa observes a national holiday (Human Rights Day), with local markets shut as a result.