South Africa's central bank keeps main interest rate unchanged

AFRICAN BUSINESS AND ECONOMYJuly 18, 2024 at 5:05 PM UTC

TLDR

South Africa's central bank maintains interest rate at 8.25% for the seventh consecutive meeting.
Monetary Policy Committee was divided, with a split decision on keeping the rate unchanged or opting for a 25-basis-point cut.
SARB continues tight monetary policy to guide inflation towards the 3%-6% target range.

South Africa's central bank kept its main interest rate unchanged for a seventh meeting in a row at 8.25% on Thursday, but for the first time since September, the decision was not unanimous.

The South African Reserve Bank's Monetary Policy Committee was split, with four members preferring an unchanged stance and two favoring a 25-basis-point rate cut.

Monetary policy has remained tight in Africa's most industrialized economy as the South African Reserve Bank (SARB) tries to steer inflation back towards the midpoint of its 3%-6% target range.

Key Takeaways

Consumer inflation stood at 5.2% year on year in May, the latest month for which data is available, the same as in April. SARB Governor Lesetja Kganyago stuck to his usual hawkish tone, adding that although two members preferred a rate cut, the risks to the inflation outlook were now on the upside whereas they were viewed as broadly balanced at the previous meeting. Key concerns for the central bank remain administered prices and services inflation, as well as stubborn global inflation.

South Africa

Inflation

Interest Rates

Economy

Rand

SARB

South African Reserve Bank