The Monetary Policy Committee (MPC) decided to keep the policy rate unchanged, at 6.75%.
Speaking about the decision at a media conference in Pretoria, on Thursday, Lesetja Kganyago, the Governor of the Reserve Bank (SARB), said despite economic growth of 1,1% in the fourth quarter of 2025, there is still global uncertainty.
“Prices for commodities like oil, gas and fertiliser have moved sharply higher. Meanwhile, there have been broad losses across equity, bond and currency markets, with only a few safe havens and energy producers showing gains.”
Kganyago said global inflation will be higher in the near term, while growth will probably suffer from supply-chain disruptions and rising costs. But the longer-term outlook is less clear.
SA’s inflation was in line with the SARB’s target, at 3.0% in February, with core inflation also at 3.0%.
Higher energy prices are expected to raise inflation in the near term.
“We expect headline will soon accelerate to around 4%, with fuel inflation over 18% for the second quarter. Our baseline forecast then has a gradual unwinding of the shock, taking inflation back to 3% late next year” said Kganyago.
In addition, SA’s growth projections remain unchanged.
Growth is expected to rise to around 2% over the next few years.
Picture: Supplied