This afternoon, the Monetary Policy Committee of the South African Reserve Bank (‘SARB’) convened its second meeting of 2026. Against the backdrop of rising geo-political tensions, elevated risks, and higher oil prices, SARB has cautiously elected to keep the repo rate at 6.75%. Accordingly, the prime lending rate remains unchanged at 10.25%.
Although market analysts had widely predicted an interest rate cut following the fall of headline consumer inflation to 3% in February, the ripple effects of the US-Iran war on global financial markets and oil trading have dampened the prospect of a rate-cutting cycle – at least for now. Noting longer-term outlook uncertainty, the likelihood of diminished growth, and the risk of inflationary shocks, including a weakened Rand, SARB re-emphasised its preference for a characteristically watchful approach.
After a series of rate cuts in 2025, current homeowners with bond repayments and prospective purchasers intent on buying property would have hoped for additional relief. However, various economists estimate that SARB could lower the repo rate in the third or fourth quarter of 2026, with some estimating that global risks may potentially delay further cuts until early 2027. In light of continued global uncertainty and inflationary pressures, SARB stressed that its decision-making will be data-driven and, as always, taken on a case-by-case basis.
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