Sarb errs on the side of caution, holds rates steady

South Africa’s Reserve Bank took a cautious approach, opting to hold the repo rate steady at 6.75% on Thursday at its first Monetary Policy Committee (MPC) meeting of 2026, despite a surging rand and a benign inflation outlook.

The decision, announced by central bank governor Lesetja Kganyago in Pretoria, keeps commercial banks’ prime interest rate at 10.25%.

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The pause in the Sarb’s cutting cycle, following the 25-basis-point cut in November, comes amid increased global geopolitical uncertainty and a cautious approach by the under-pressure US Federal Reserve, which also left its federal funds rate unchanged at the 3.5%-3.75% target on Wednesday.

Kganyago said the MPC decision this week was split. Most economists and market watchers had expected a tight vote, with the view that any further Sarb cut would likely only come in March, favouring a cautious wait-and-see approach.

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