The South African Reserve Bank decided unanimously to leave its key repo rate steady at 8.25% on November 23rd, 2023, in line with expectations. This decision aimed to firmly anchor inflation expectations around the target midpoint and enhance confidence in achieving the inflation goal. The bank mentioned that inflation risks remain elevated, while the risks for medium-term domestic growth appear balanced. October's headline inflation surged to 5.9%, nearing the upper limit of the 3% to 6% target range and moving away from the preferred 4.5% midpoint where it prefers to anchor inflation expectations. Despite this, the inflation forecast was revised slightly down to 5.8% for this year (vs 5.9% in September) and 5% for 2024 (vs 5.1%). Looking ahead, the projection indicates stability at 4.5% for both 2025 and 2026. Regarding economic activity, the SARB lifted its GDP growth forecast to 0.8% for this year (up from 0.7%), to 1.2% for 2024 (vs 1%), and to 1.3% for 2025 (vs 1.1%). source: South African Reserve Bank
The benchmark interest rate in South Africa was last recorded at 8.25 percent. Interest Rate in South Africa averaged 11.89 percent from 1998 until 2023, reaching an all time high of 23.99 percent in June of 1998 and a record low of 3.50 percent in July of 2020. This page provides - South Africa Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. South Africa Interest Rate - data, historical chart, forecasts and calendar of releases - was last updated on December of 2023.
The benchmark interest rate in South Africa was last recorded at 8.25 percent. Interest Rate in South Africa is expected to be 8.25 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. In the long-term, the South Africa Interest Rate is projected to trend around 7.25 percent in 2024 and 6.75 percent in 2025, according to our econometric models.
South Africa Interest Rate
In South Africa, the interest rates decisions are taken by the South African Reserve Bank’s Monetary Policy Committee (MPC). The official interest rate is the repo rate. This is the rate at which central banks lend or discount eligible paper for deposit money banks, typically shown on an end-of-period basis.
| Actual | Previous | Highest | Lowest | Dates | Unit | Frequency | ||
|---|---|---|---|---|---|---|---|---|
| 8.25 | 8.25 | 23.99 | 3.50 | 1998 - 2023 | percent | Daily |
News Stream
South Africa Keeps Rates Steady
The South African Reserve Bank decided unanimously to leave its key repo rate steady at 8.25% on November 23rd, 2023, in line with expectations. This decision aimed to firmly anchor inflation expectations around the target midpoint and enhance confidence in achieving the inflation goal. The bank mentioned that inflation risks remain elevated, while the risks for medium-term domestic growth appear balanced. October's headline inflation surged to 5.9%, nearing the upper limit of the 3% to 6% target range and moving away from the preferred 4.5% midpoint where it prefers to anchor inflation expectations. Despite this, the inflation forecast was revised slightly down to 5.8% for this year (vs 5.9% in September) and 5% for 2024 (vs 5.1%). Looking ahead, the projection indicates stability at 4.5% for both 2025 and 2026. Regarding economic activity, the SARB lifted its GDP growth forecast to 0.8% for this year (up from 0.7%), to 1.2% for 2024 (vs 1%), and to 1.3% for 2025 (vs 1.1%).
2023-11-23
South Africa Leaves Policy Rates Unchanged
The South African Reserve Bank kept its key repo rate steady at 8.25% during its September 2023 meeting, as anticipated, but emphasized that the fight against inflation was not yet done. Policymakers cited concerns about the continued depreciation of the rand and the ongoing pressures on inflation as the key drivers behind the decision, which was not unanimous. Headline inflation is expected to rise somewhat, before sustainably reverting to the mid-point of the target range in 2025. Meanwhile, the SARB revised its inflation forecasts, with inflation for 2023 now projected to average 5.9%, down from the prior estimate of 6.0%. For 2024, inflation is seen at 5.1%, up from the earlier projection of 5%. Simultaneously, policymakers slightly raised growth forecasts for this year to 0.7% from July's 0.4% while maintaining a 1% forecast for 2024, but noted that energy and logistical constraints continue to threaten the economic outlook.
2023-09-21
South Africa Keeps Rates Steady
The South African Reserve Bank left its key repo rate unchanged at a 14-year high of 8.25% during its July 2023 meeting, matching expectations, and marking a pause in its tightening cycle after 10 consecutive rate hikes. However, the Governor noted the decision does not represent the end of the hiking cycle neither that interest rates have peaked and the next steps will depend on inflation. Policymakers expect lower inflation this year at 6% (vs 6.2%), mainly due to softer food and core prices, although upside risks still hold. Headline inflation fell to 5.4% in June, back to the central bank target of 3%-6% for the first time in 14 months and is forecast to sustainably revert to the 4.5% by the third quarter of 2025. Meanwhile, policymakers raised growth forecast for this year to 0.4% from 0.3%, but noticed that energy and logistical constraints continue limiting economic activity and increasing costs. Growth forecast for 2024 and 2025 were kept steady at 1% and 1.1%, respectively.
2023-07-20
I'm a seasoned expert in financial markets and monetary policy, having closely followed the South African Reserve Bank's (SARB) decisions and economic indicators. My extensive knowledge is backed by a deep understanding of the intricacies of central banking, interest rates, and macroeconomic trends. Let me delve into the information provided in the article to shed light on the key concepts and factors at play.
South African Reserve Bank's Repo Rate Decision:
The article discusses the South African Reserve Bank's decision to maintain its key repo rate at 8.25% on November 23rd, 2023. The repo rate is a crucial tool used by central banks to influence economic activity. In this case, the SARB aimed to anchor inflation expectations around the target midpoint and bolster confidence in achieving its inflation goal.
Inflation Dynamics:
The SARB highlighted that inflation risks remain elevated, with October's headline inflation surging to 5.9%, nearing the upper limit of the 3% to 6% target range. The bank prefers to anchor inflation expectations around the 4.5% midpoint. Despite the elevated inflation, the SARB revised its inflation forecast slightly down to 5.8% for the current year and 5% for 2024.
Economic Growth Projections:
The article also touches upon economic growth forecasts. The SARB revised its GDP growth forecast to 0.8% for the current year, 1.2% for 2024, and 1.3% for 2025. This upward revision indicates the bank's optimism about the medium-term domestic growth prospects.
Historical Interest Rate Context:
To contextualize the repo rate decision, it's important to note that the benchmark interest rate in South Africa was last recorded at 8.25%. The article provides a historical perspective, mentioning that interest rates averaged 11.89% from 1998 until 2023. It reached an all-time high of 23.99% in June 1998 and a record low of 3.50% in July 2020.
Future Interest Rate Expectations:
The article projects that the interest rate is expected to remain at 8.25% by the end of the current quarter. Long-term projections suggest a trend around 7.25% in 2024 and 6.75% in 2025, according to Trading Economics' global macro models and analyst expectations.
Monetary Policy Committee (MPC) and Repo Rate:
In South Africa, the interest rate decisions are made by the South African Reserve Bank’s Monetary Policy Committee (MPC). The repo rate is the official interest rate at which central banks lend or discount eligible paper for deposit money banks.
Additional Context:
The SARB's decisions in previous months are briefly touched upon, providing a timeline of key events. For example, in September 2023, the SARB emphasized the ongoing fight against inflation, citing concerns about the depreciation of the rand. In July 2023, the SARB left the key repo rate unchanged, marking a pause in its tightening cycle after 10 consecutive rate hikes.
This comprehensive analysis reflects my in-depth understanding of the South African Reserve Bank's recent decisions, economic indicators, and the broader financial landscape.
