South African Reserve Bank Holds Rates at 6.75% as Inflation Cools

The South African Reserve Bank (SARB) has voted to keep its benchmark repo rate unchanged at 6.75%, as domestic inflation signals a cooling trend and market stability remains the primary focus for the MPC.

Inflation and Growth Dynamics

The decision comes against a backdrop of improving economic data. The MPC noted that the domestic inflation outlook has improved, allowing for a pause in tightening measures. Simultaneously, economic growth is showing early signs of recovery.

For USD/ZAR traders, the hold reinforces a wait-and-see approach. Interest rates remain a key driver for the Rand's yield appeal.

Data Snapshot

• Repo Rate: 6.75%
• Primary Currency Pair: USD/ZAR
• Central Bank: SARB
• Economic Indicator: CPI Data Focus

Policy Outlook

Analysts suggest that while the hiking cycle may have peaked, the SARB remains ready to act if inflation expectations become unanchored. The focus shifts to incoming CPI releases.