By Alexandra Wexler
JOHANNESBURG–The South African Reserve Bank unanimously decided to maintain its main repo rate at 6.75% on Thursday as it braces for the long-term consequences of the war in Iran.
The decision continues a pause in the bank’s cutting cycle that began in September 2024, when the SARB began to reduce rates from a 15-year high of 8.25%.
“The fact is, we are still only a few weeks into this crisis,” said SARB Governor Lesetja Kganyago. “The coming months will be crucial for assessing the longer-term inflation consequences.”
Headline inflation in South Africa was 3% in February, down from 3.5% in January. In 2025, inflation averaged 3.2%, a 21-year low. The SARB’s inflation target is 3%, with a “tolerance band” of plus or minus one percentage point.
For 2025, the SARB said GDP grew 1.1%, down from its January projection of a 1.3% expansion. The SARB projects growth of 1.4% this year, unchanged from its January estimate.
“South Africa has made important macroeconomic progress recently, with a lower inflation target, improved fiscal prospects and steadier growth,” Kganyago said. “Prudent monetary policy will help sustain these gains, despite difficult global conditions.”
Write to Alexandra Wexler at alexandra.wexler@wsj.com
(END) Dow Jones Newswires
03-26-26 1010ET