SARB splits on interest rates as MPC votes to keep repo rate at 7%
The South African Reserve Bank’s Monetary Policy Committee (MPC) has kept the repo rate unchanged at 7%, but the latest decision revealed a split among policymakers over the country’s interest rate outlook.
As a result, the prime lending rate remains at 10.50%.
Reserve Bank Governor Lesetja Kganyago announced the decision on Thursday, saying four MPC members voted to keep interest rates unchanged, while two preferred a 25-basis-point increase, highlighting differing views on inflation risks and the economic outlook.
Kganyago said the central bank’s Quarterly Projection Model indicates that interest rates are expected to remain broadly stable for the remainder of the year.
“Four members preferred a hold, while two favoured an increase of 25 basis points. The committee agreed that the outlook is uncertain, and with the rate increase at our previous meeting, the policy stance is appropriate for now,” he said.
The decision means consumers and businesses will see no immediate change in borrowing costs, although the divided vote suggests the Reserve Bank remains alert to upside inflation risks.
The MPC said uncertainty continues to cloud both the domestic and global economic environment, with policymakers opting to maintain the current monetary policy stance while monitoring future inflation and growth trends.