SARB Keeps Interest Rate at 7% as Inflation Cools
The South African Reserve Bank (SARB) kept its benchmark interest rate unchanged at 7.00% during its September 18, 2025 policy meeting.
Inflation eased to 3.3% in August, down from 3.5% in July, helped by lower food and fuel prices. Despite the slowdown, SARB opted to hold steady, saying earlier cuts are still working their way through the economy. Since September last year, the bank has already lowered rates by 125 basis points.
The decision was split. Four members of the Monetary Policy Committee voted to pause, while two backed another 25 basis-point cut. The majority argued that moving too quickly could undermine price stability, especially as global risks remain.
SARB slightly raised its 2025 growth forecast to 1.2%, citing better second-quarter output. Inflation expectations for next year were nudged up to 3.4%, still inside the 3–6% target range.
For households and businesses, the hold means borrowing costs stay high for now. Mortgages, loans, and credit lines remain expensive, but the bank is signaling caution until it sees stronger signs of recovery.
Looking ahead, the pace of disinflation, consumer demand, and the rand’s performance will shape the next move. If inflation stays contained and domestic growth falters, pressure for another cut will build.
