Interest rate South Africa

South African Central Bank Maintains Repo Rate at 15-Year High Amid Economic Struggles

Repo rate held steady at 8.25% as South Africa's central bank aims to combat inflation. Will interest rate cuts provide relief to the beleaguered middle class? Find out more!

South Africa's central bank, the South African Reserve Bank (SARB), has chosen to maintain the country's repo rate at 8.25% in an effort to tackle elevated inflation expectations. The Monetary Policy Committee (MPC) emphasized the necessity of a restrictive policy stance to address the current economic challenges.

Despite remaining at a 15-year high since May last year, the repo rate has not budged, with SARB Governor Lesetja Kganyago highlighting persistent high inflation expectations as a major concern. This decision marks the fifth consecutive meeting where the bank has opted to keep the rate stable.

Economists had predicted this outcome, with all polled by Reuters forecasting the rate to remain unchanged. The decision was made amidst warnings from economists about the precarious state of South Africa's middle class, projecting a bleak outlook for the next two years and doubting the efficacy of interest rate cuts in alleviating their hardships.

Following the March Monetary Policy Committee (MPC) meeting, Governor Lesetja Kganyago reaffirmed the decision to maintain the repo rate at 8.25%. The central bank's steadfastness underscores their commitment to addressing the challenges posed by stubbornly high inflation expectations.