The South African Reserve Bank (Sarb) is playing it cautious as levels of global uncertainty reach unprecedented levels due to US President Donald Trump's trade wars and other shenanigans.
Listen to this article 5 min Listen to this article 5 min The Sarb left its key repo and the prime lending rate for consumers unchanged at 7.5% and 11.0% respectively on Thursday, citing "extreme levels of uncertainty" at the conclusion of the bi-monthly meeting of its Monetary Policy Committee (MPC).
This brings a temporary halt to the Sarb's loosening cycle, which has seen it lower interest rates by 75 basis points since September 2024 in the face of slowing inflation.
"The world economy is experiencing extreme levels of uncertainty. Trade tensions have escalated, and longstanding geopolitical relationships are shifting abruptly. In these circumstances, the global economic outlook is unpredictable," the MPC statement said.
Trump 2.0's unfolding trade wars and scatter-shot tariffs are roiling global financial markets and raising the spectre of renewed inflation in the US and worldwide, while simultaneously slamming the brakes on economic growth.
Fed chairman Jerome Powell pointedly said on Wednesday that tariffs -- meaning Trump's tariffs -- were "clearly" pushing up prices as the US central bank held its benchmark interest rate steady at around 4.3%.
The Sarb does not always dance to the tune of the Fed, but often follows its lead to maintain...
