In an address to shareholders at the South African Reserve Bank’s 105th annual Ordinary General Meeting, Governor Lesetja Kganyago outlined a new strategy cycle that streamlines the Bank’s focus to three areas: price stability, financial stability and payments. He also framed the policy environment as one of elevated global uncertainty, with South Africa’s growth outlook still weak and inflation broadly contained. The Bank’s latest forecast round incorporated a higher tariff rate, lowering its growth projection for the year by about 0.1 percentage points, with growth still expected to be close to 1%. Inflation has risen 3% over the past 12 months and is expected to edge up temporarily in coming months due to higher food inflation, particularly meat, and a slower pace of fuel price declines, before returning to around 3% over the medium term, the bottom of the 3–6% target range. Since September 2024, the policy rate has fallen by 125 basis points, and the Bank’s model indicates lower interest rates if inflation settles at 3% and expectations continue to decline, while cautioning that this is not a promise. The address also highlighted recent enforcement actions against individual institutions, increased focus on artificial intelligence-related risks including cyberattacks, ongoing work to scale a more accessible fast payments system under the Payments Ecosystem Modernisation project, and efforts with other Southern African Development Community central banks to improve cross-border payments. On financial reporting, the Bank recorded profit after tax of R118 billion, largely reflecting R100 billion received from National Treasury under the new Gold and Foreign Exchange Contingency Reserve Account settlement, and reported foreign exchange reserves of around USD 68 billion. Operationally, the Governor noted that the first group of staff returned to the refurbished Head Office on a full-time basis on 4 August as part of a broader shift back from remote and hybrid work.
South African Reserve Bank 2025-08-08
South African Reserve Bank sets three strategic priorities and reports R118 billion profit driven by GFECRA settlement
At the South African Reserve Bank's 105th annual Ordinary General Meeting, Governor Lesetja Kganyago outlined a strategy focusing on price and financial stability amid global uncertainty. The Bank forecasts slight growth reduction and temporary inflation rise, with potential for lower interest rates if inflation stabilizes at 3%. The address covered enforcement actions, AI-related risks, payment system modernization, cross-border payment improvements, and financial reporting, noting a profit after tax of R118 billion and foreign exchange reserves of USD 68 billion.