South Africa Leaves Interest Rates at 8.25%, Rand Falls Rallies with Delayed Rate Cuts

The South African Reserve Bank (SARB) kept its benchmark repo interest rate at 8.25% at its January 25th, 2024, meting as widely anticipated. Rates remain at their highest since 2009. The bank highlighted the persistence of inflation risks while emphasizing a balanced evaluation of risks to medium-term growth. The SARB noted that the return of inflation to the target has been slow, despite the expected gradual moderation. Headline inflation fell for a second month to 5.1% in December from 5.5% … Continue reading “South Africa Leaves Interest Rates at 8.25%, Rand Falls Rallies with Delayed Rate Cuts”

South Africa Leaves Interest Rates at 8.25% in Split Vote, Rand Falls

The South African Reserve Bank (SARB) kept its benchmark repo interest rate at 8.25% at its July 2023 meeting as markets had expected. The decision was split three members of the bank’s monetary policy committee voted for the pause, two advocated for a further increase of 0.25 percentage points. “Have interest rates peaked? The answer is a resounding no,” said Kganyago at a press conference. “Is this the end of the hiking cycle? No, it is not. It depends on … Continue reading “South Africa Leaves Interest Rates at 8.25% in Split Vote, Rand Falls”

South Africa Raises Interest Rates 50bps, Rand Falls to All Time Low

The South African Reserve Bank (SARB) increased its benchmark repo interest rate by another 50 bps to 7.25% at its May 2023 meeting. Markets had expected a smaller 25 bps increase. Policymakers cited concerns regarding the significant depreciation of the rand and the mounting pressures of inflation as key drivers behind the rate adjustment. The SARB also revised its inflation forecasts, with inflation for 2023 now projected to average 6.2%, up from the previous estimate of 6.0%. The move triggered … Continue reading “South Africa Raises Interest Rates 50bps, Rand Falls to All Time Low”

South Africa Raises Interest Rates 50bps, Revises Inflation Higher

The South African Reserve Bank (SARB) increased its benchmark repo interest rate by another 50 bps to 7.75% at its March 2023 meeting. Markets had expected a smaller 25 bps increase. The move triggered a surge in the rand , which extended earlier gains to rise nearly 2% against the dollar. It was the 9th consecutive rate hike since policy normalization started in November 2021, bringing borrowing costs to the highest since May 2009. Policymakers revised significantly upward headline inflation … Continue reading “South Africa Raises Interest Rates 50bps, Revises Inflation Higher”

South African Rand Plunges on President Cyril Ramaphosa Farmgate Scandal Rumors

The South African rand fell over 4% against the dollar to around 17.95 before paring losses to the lowest since November 4th, after “farmgate” rumors spread that President Cyril Ramaphosa was considering resigning after a panel report found preliminary evidence, he may have committed serious misconduct. Ramaphosa was due to address the nation on Thursday, Ramaphosa’s spokesman Vincent Magwenya said: “An announcement is imminent. … I can’t confirm the date and time, we will advise.” in response to Reuters. Farmgate … Continue reading “South African Rand Plunges on President Cyril Ramaphosa Farmgate Scandal Rumors”

South Africa Raises Interest Rates 75bps to Tame Inflation

The South African Reserve Bank (SARB) increased its benchmark repo interest rate by another 75 bps to 7% at its November 2022 meeting, as widely expected. Prime is now at 10.5%. This was the 7th consecutive rate hike as the SARB tries to tame inflation expectations more firmly around the mid-point of the target band and achieve the inflation target in 2024. South Africa’s inflation rate unexpectedly rose to 7.6% in October from 7.5% in September. The decision was not … Continue reading “South Africa Raises Interest Rates 75bps to Tame Inflation”

South Africa Raises Interest Rates Despite Lowering Growth and Inflation Forecasts

The South African Reserve Bank (SARB) increased its benchmark interest rate for the first time in over two years seeking to get ahead of what it sees as elevated inflation risks. The decision was split and comes depite cutting GDP and infaltion estimates.