The South African Reserve Bank’s Monetary Policy Committee held the policy rate at 7% in July 2026, judging that inflation remains too high and growth is weak, with upside risks to inflation and downside risks to activity. After holding at 6.75% in March, the MPC raised the rate by 25 basis points in May and then kept it unchanged in July. The committee split four-to-two for a hold over a hike, saying the previous increase left policy appropriate for now and somewhat restrictive. Inflation was 5.0% against the central bank’s 3% target with a tolerance band of plus or minus 1 percentage point, and the MPC expects headline inflation to stay above 4% until early next year, largely because of fuel costs, while services and underlying inflation measures point to firmer pressures and survey inflation expectations have risen. First-quarter growth ran close to 2% year on year, driven by net exports rather than domestic demand, and the central bank anticipates slower growth in the second and third quarters as consumer and business confidence weaken, before a second-half recovery in its baseline. The rand has been resilient, staying near its start-of-year level against the USD and stronger against the euro, helping contain import prices. Globally, the Middle East war has disrupted supply chains and pushed oil back to roughly USD90 a barrel, while world growth and inflation forecasts are largely unchanged. The Quarterly Projection Model shows rates broadly stable for the rest of the yea
South African Reserve Bank2026-07-23
South African Reserve Bank Holds Policy Rate at 7%
The South African Reserve Bank’s Monetary Policy Committee kept the policy rate at 7.0% in July 2026 by a four-to-two vote, saying inflation at 5.0% remains too high against the 3% target while growth is weak and the prior 25 basis point increase in May leaves policy appropriately restrictive for now. The committee expects headline inflation to stay above 4% until early next year, sees slower growth in the second and third quarters, and said decisions will remain meeting by meeting despite its model implying broadly stable rates this year and cuts later as inflation returns to target.