South Africa Monetary Policy November 2021

South Africa

South Africa: SARB delivers first rate hike in three years in November

November 18, 2021

At its 18 November meeting, the Monetary Policy Committee of the South African Reserve Bank (SARB) voted to raise the repurchase rate by 25 basis points to 3.75% from 3.50%—where it had been since July 2020. The decision marked the first rate hike since November 2018 and largely took market analysts by surprise. However, the vote was split, with two out of the five members voting to keep the rate unchanged.

The decision reflected the Bank’s assessment that despite incoming data hinting at a mixed economic performance in H2, activity should have rebounded strongly in 2021 overall. Moreover, the SARB’s growth forecasts for 2022–2023 were unchanged from September. That said, the Bank noted that risks to the medium-term growth outlook remain skewed to the downside. Turning to price pressures, the SARB upwardly revised its inflation projections for Q4 and for 2022–2023, although inflation is still seen remaining around the midpoint of the 3.0%–6.0% target band over the forecast period. However, the Bank noted that risks to the short-term outlook have increased, including volatile food, oil and electricity prices. It also added that “a weaker currency, higher domestic import tariffs, and escalating wage demands present additional upside risks to the inflation forecast”. Consequently, the Bank opted to hike the rate, while leaving its policy stance highly accommodative.

Regarding forward guidance, the SARB hinted at quarterly rate increases until end-2024, stating that “given the expected trajectory for headline inflation and upside risks, the Committee believes a gradual rise in the repo rate will be sufficient to keep inflation expectations well-anchored and moderate the future path of interest rates”. That said, the Bank stated that the tightening path remains susceptible to change as new data and risks are assessed.

The next monetary policy meeting is scheduled for 27 January 2022.

FocusEconomics Consensus panelists see the SARB repo rate ending 2022 at 4.41% and 2023 at 5.14%.


Author:, Junior Economist

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South Africa Monetary Policy Chart


South Africa Monetary Policy November 2021

Note: Repo rate in %.
Source: South African Reserve Bank (SARB).


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