Interest Rate in South Africa
South Africa - Interest Rate
SARB slows down pace of tightening in January
At its 24–26 January meeting, the Monetary Policy Committee of the South African Reserve Bank (SARB) increased the repurchase rate by 25 basis points, bringing it to 7.25%. The move, which came on the heels of November’s 75 basis point hike, largely took markets by surprise—a 50 basis-point increase had been priced in. The decision regarding the size of the hike—the eighth consecutive increase since November 2021—was once again not unanimous: Two of the five committee members preferred a 50 basis point increase.
The move was driven by the Bank’s assessment that risks to the inflationary outlook remain skewed to the upside, partially due to higher price expectations for food and energy. The SARB left its 2023 headline inflation forecast unchanged but upwardly revised its 2024 forecast. Conversely, core inflation forecasts for 2023 and 2024 were both downwardly revised. While the SARB forecasts both headline and core inflation within the SARB’s 3.0–6.0% target band in both 2023 and 2024, they are seen above the mid-point of the range.
With regards to activity, the SARB drastically cut its growth forecasts for 2023 and 2024; they were revised to 0.3% and 0.7%, respectively, down from 1.1% and 1.4%. The drastic cooling of the economy called for a slowing of the pace of tightening.
With regards to future policy moves, the SARB’s tone was largely unchanged from its previous communiqué—hawkish but vague. The Bank reiterated its commitment to bringing inflation back to the mid-point of the target band and anchoring inflation expectations. However, as uncertainty has increased, it stated that “monetary policy decisions will continue to be data dependent and sensitive to the balance of risks to the outlook”.
The next monetary policy meeting is scheduled for 28–30 March.
FocusEconomics Consensus panelists see the SARB repo rate ending 2023 at 7.33% and 2024 at 6.50%.
South Africa - Interest Rate Data
|Policy Interest Rate (%)||6.25||7.00||6.75||6.75||6.50|
5 years of economic forecasts for more than 30 economic indicators.
South Africa Interest Rate Chart
Source: South African Reserve Bank.
South Africa Facts
|Bond Yield||8.26||0.29 %||Dec 31|
|Exchange Rate||13.98||-0.21 %||Dec 31|
|Stock Market||0.1||-0.44 %||Jan 06|
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January 26, 2023
At its 24–26 January meeting, the Monetary Policy Committee of the South African Reserve Bank (SARB) increased the repurchase rate by 25 basis points, bringing it to 7.25%.
January 18, 2023
Inflation fell to 7.2% in December, easing slightly from November’s 7.4%.
January 10, 2023
Manufacturing output increased 2.0% in month-on-month seasonally adjusted terms in November, which contrasted October's 6.2% decrease.
January 5, 2023
The S&P Global Purchasing Managers’ Index (PMI) moderated to 50.2 in December, down from November’s 50.6.
December 14, 2022
Inflation dropped to 7.4% in November from October’s 7.6%.