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
|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 third consecutive time in November
At its last scheduled meeting of the year on 21–23 November, the Monetary Policy Committee of the South African Reserve Bank (SARB) once again extended the pause in its tightening cycle and left the repurchase rate unchanged at 8.25%. The decision, which had been priced in by markets, was the third consecutive hold. In contrast to September’s meeting, the decision was unanimous.
In October, headline inflation rose again, nearing the upper bound of the SARB’s 3.0–6.0% target band, while core inflation eased for a second consecutive month. Moreover, the SARB downwardly revised headline and core inflation expectations for 2023 and 2024—all four metrics were lowered by 0.1 percentage points—and kept expectations unchanged for 2025. All six of these numbers were within the SARB’s target band, with both headline and core inflation projected to be at the mid-point of the target range in 2025. Nevertheless, the SARB noted that risks to the inflationary outlook remained skewed to the upside and included the evolution of the rand against the USD, the El Niño weather pattern, logistical constraints and the price of both electricity and key imports. Regarding activity, the SARB upwardly revised its GDP growth forecast for 2023–2025.
Concerning future policy moves, the SARB did not provide explicit forward guidance, but it reaffirmed its willingness to resume the tightening cycle if its upside inflationary risks materialize. The Bank also stated it would maintain a policy rate level that would anchor inflation expectations at 4.5%—the mid-point of the target range. Our panelists believe the tightening cycle has now concluded, and some expect the loosening cycle to begin as early as Q1 2024. The next monetary policy meeting is scheduled for 25 January 2024.
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