South Africa Monetary Policy

South Africa

South Africa: South African Reserve Bank leaves the repo rate at 5.75%

January 29, 2015

At its 29 January meeting, the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) unanimously decided to keep the repurchase rate unchanged at 5.75%. The decision met market expectations. The Bank increased the repo rate twice in 2014 in order to fight high inflation.

Regarding the domestic economy, the Bank stated that the growth outlook remains subdued. The SARB revised down the growth forecast for both 2015 and 2016. For this year, the Central Bank now expects growth of 2.2%, which is down from the previous forecast of 2.5%. In addition, the growth forecast for next year has been downgraded from 2.9% to 2.4%. In revising its forecasts, the Bank took into account the recent disruptions in electricity supply, which more than offset the positive growth impact of lower oil prices.

Regarding price developments, the MPC said that inflation has been declining on the back of a further drop in international oil prices. As a result, the short-term inflation outlook has changed significantly. However, the Central Bank added that the prospects for, “the longer term will depend on the persistence of the oil price decline. Even a moderate increase in oil prices going forward will reverse the favorable inflation trajectory, and the […] growth benefits.”

Within this setting, FocusEconomics Consensus Forecast panelists expect the repo rate to end this year at 5.92%. For next year, the panel expects the repo rate to end the year at 6.45%.


Author:, Senior Economist

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South Africa Monetary Policy Chart


SouthAfrica Monetary Policy January 2015

Note: Monetary Policy Rate in %.
Source: South African Reserve Bank (SARB).


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