The South African Reserve Bank (SARB) has maintained on July 23 its benchmark repo rate at 7 per cent, despite inflation rising to 5 per cent in June from 4.5 per cent in May.
SARB Governor Lesetja Kganyago said the Monetary Policy Committee voted 4-2 to keep the rate unchanged, with two members favouring a 25-basis-point increase.
He said the inflation outlook had improved slightly but remained above the bank’s preferred 3 per cent target, while economic growth continued to be weak. According to the governor, the current policy stance remains appropriate, with interest rates still moderately restrictive.
L. Kganyago attributed recent inflationary pressures mainly to higher fuel prices driven by supply disruptions linked to the Middle East conflict, adding that municipal challenges were also constraining economic growth.
The Central Bank expects economic activity to strengthen in the second half of 2026 as external pressures ease and domestic reforms take effect, while reaffirming its commitment to returning inflation to its 3 per cent target over time.