Canada: Bank of Canada decreases rates in July
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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
Note: This chart displays Policy Interest Rate (%) for South Africa from 2014 to 2023.
Source: Macrobond.
South Africa Interest Rate Data
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| SARB Repo Rate (%, eop) | 6.50 | 3.50 | 3.75 | 7.00 | 8.25 |
| 3-Month JIBAR (%, eop) | 7.16 | 3.87 | 3.85 | 6.50 | 8.43 |
| 10-Year Bond Yield (%, eop) | 9.02 | 9.70 | 9.82 | 11.30 | 11.33 |
South African Reserve Bank holds fire in May
At its meeting on 30 May, the South African Reserve Bank (SARB) decided to keep the repurchase rate unchanged at a 15-year high of 8.25% for the sixth consecutive meeting. The hold was again unanimous and had been priced in by markets.
The Central Bank's hold reflected higher-than-expected inflation outcomes raising inflation expectations. In addition, while the SARB sees risks to the inflationary outlook largely balanced, the Bank decided to delay normalizing policy in order to anchor inflation expectations around 4.5%. Regarding economic activity, the SARB left unchanged all its GDP growth forecasts for 2024–2026; for this year, it sees the economy doubling its growth rate from 2023.
The SARB provided no explicit forward guidance, stating that its decisions will continue to be data-dependent and sensitive to the balance of risks to the outlook. Of the panelists that expect the SARB to kick off its loosening cycle this year—the vast majority—25–75 basis points of cuts are expected. The SARB will next convene on 18 July.
Goldman Sachs analysts said: “We forecast a rate cut in Q3, which we see as being a close call between the July and September meetings. While our baseline is for a cut in July, our conviction in timing is low and dependent on incoming data as well as currency developments.”
Consensus Forecasts and Projections for the next ten years
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 16 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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