SARB Repo Rate in South Africa
The South African Reserve Bank's policy rates from 2013 to 2022 reflected the country's economic challenges. Initially, rates were increased to combat inflation and stabilize the Rand. However, in 2020, in response to the COVID-19 economic fallout, rates were significantly reduced to historic lows to support economic growth. By 2022, as the economy began recovering and inflationary pressures emerged, the central bank started increasing rates.
The SARB Repo Rate ended 2022 at 7.00%, up from the 3.75% end-2021 value and higher than the reading of 5.00% a decade earlier. For reference, the average policy rate in Sub-Saharan Africa was 11.80% at the end of 2022. For more interest rate information, visit our dedicated page.
South Africa Interest Rate Chart
South Africa Interest Rate Data
2018 | 2019 | 2020 | 2021 | 2022 | |
---|---|---|---|---|---|
SARB Repo Rate (%, eop) | 6.75 | 6.50 | 3.50 | 3.75 | 7.00 |
3-Month JIBAR (%, eop) | 7.61 | 7.16 | 3.87 | 3.85 | 6.50 |
10-Year Bond Yield (%, eop) | 9.44 | 9.02 | 9.70 | 9.82 | 11.30 |
SARB holds fire a fourth consecutive time in January
At its first scheduled meeting of 2024 on 25 January, the Monetary Policy Committee of the South African Reserve Bank (SARB) extended the pause in its tightening cycle, keeping the repurchase rate at 8.25% for the fourth consecutive meeting. The decision, which was unanimous, had been priced in by markets.
The SARB’s hold was a cautious decision; the Bank’s baseline scenario is for inflation to continue to gradually recede, but risks to the outlook remained skewed to the upside, in part because imported goods inflation is sensitive to rand weakness. The SARB maintained its 2024 and 2026 headline inflation forecasts unchanged at 5.0% and 4.5%, respectively, while it maintained its core inflation forecasts for these two years at 4.6% and 4.5%, respectively. However, it upwardly revised its expections for both headline and core inflation in 2025 to 4.6%. As such, all six forecasts lie within the SARB’s 3.0–6.0% target band, and it sees inflation hovering around the mid-point of the target range from Q3 2024 onwards. Regarding activity, the SARB left its GDP growth forecasts for 2024–2026 unchanged.
The SARB’s communiqué was void of explicit forward guidance. It once again stated that current policy was consistent with bringing both inflation and inflation expectations down to 4.5%—the mid-point of the target band. A majority of our panelists have penciled in the first interest rate cut for Q2. That said, a few see the loosening cycle beginning before the end of Q1, suggesting the SARB could cut the repo rate when it convenes next on 27 March.
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects South African interest rate projections for the next ten years from a panel of 17 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for South African interest rate.
Download one of our sample reports to visualize what a Consensus Forecast is and see our South African interest rate projections.
Want to get access to the full dataset of South African interest rate forecasts? Send an email to info@focus-economics.com.
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