The South African Reserve Bank chose patience over stimulus on Thursday, holding its repo rate steady despite muted inflation.
The South African Reserve Bank's (Sarb) Monetary Policy Committee (MPC) voted to keep the repo rate unchanged at 7% after its meeting on Thursday, 18 September.
The decision was close, with four members backing a hold and two pushing for a 25-basis-point cut.
Sarb governor Lesetja Kganyago said the pause is deliberate - that the Bank wants to observe the impact of the 125 basis points in cuts since September last year before moving again.
Fragility persists
The Bank has nudged up its 2025 growth forecast from 0.9% to 1.2% after GDP data surprised on the upside last week.
Kganyago cautioned that stronger growth cannot be taken for granted. "Reaching a healthy growth rate will require much higher investment levels than we are achieving now."
Electricity prices remained one of the central obstacles. "Our forecast now incorporates higher electricity price inflation of nearly 8% rather than 6%," the governor said.
"This is a reminder of the serious dysfunction in administered prices, which undermines purchasing power and weakens growth. The solution to this crisis is not a higher level of inflation, but...
