(Archive photo: FreePik)
The Reserve Bank’s monetary policy committee decided to keep the interest rate unchanged at 6.75% for the time being, citing growing concerns about inflationary risks fueled by rising oil prices and geopolitical uncertainty stemming from the conflict in the Middle East.
Lesetja Kganyago, the president of the Reserve Bank, said on Thursday that it was a unanimous decision.
The rise in oil prices has raised concerns about global inflation and the risk of a recession.
Fuel prices are expected to rise by between R5 and R9 per liter for petrol and diesel in April, unless the government announces measures within the next few days.
The Reserve Bank’s repo rate decision means that SA’s prime lending rate for commercial banks remains constant at 10.25%.
“At this point, it is clear that global inflation will be higher in the near term, while growth is likely to suffer from supply chain disruptions and rising costs. But the longer-term outlook is less clear.”
Kganyago says the growth projections for South Africa will remain “largely unchanged”.
The MPC keeps the policy rate unchanged at 6.75% #SARBMPCMAR26 #SARBPolicyRate pic.twitter.com/9exaivUfFW
— SA Reserve Bank (@SAReserveBank) March 26, 2026
“There were data revisions that lowered growth in 2025, which makes 2026 look a bit stronger by comparison. This offsets some of the impact of the current shock.”
Kganyago says higher energy prices will soon lead to higher inflation, with headline inflation accelerating to 4%. However, fuel inflation will be more than 18% for the second quarter.
“Our baseline forecast then has a gradual unwinding of the shock, bringing inflation back to 3% late next year.”
The Reserve Bank’s latest projections point to a longer period of unchanged interest rates, which has delayed the previously expected easing cycle.
“The latest forecasts from our quarterly projection model show that interest rates are unchanged for a longer period, postponing the reductions from the January projections.”
Inflation for February was exactly in line with our target but conflict in the Middle East is creating new price pressures. #SARBMPCMAR26 #SARBPolicyRate pic.twitter.com/ibdAbKR6xL
— SA Reserve Bank (@SAReserveBank) March 26, 2026
Kganyago further said that the policy stance is being treated as “moderately restrictive”, helping to bring inflation back to the 3% target.
“Our decisions will continue to be made on a meeting-by-meeting basis, with careful attention to the outlook, data outcomes and the balance of risks to the forecast.”