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In a much-needed positive message, the South African Reserve Bank (SARB) decided to keep interest rates on hold last week while even giving an indication South Africans can expect rate cuts from early next year.

This is welcome news for anyone who is struggling to keep their head above water, particularly with home loans.

Annual headline consumer inflation rose from 5.4% in September to 5.9% in October, but despite the higher-than-expected inflation, SARB’s Monetary Policy Committee (MPC) decided to keep the repo rate at 8.25%.

“Importantly, the decision to pause was unanimous, unlike at the previous two meetings (when votes were split between a pause and a 25 bps increase),” the Bureau for Economic Research (BER) said.

“Underpinning the decision was SARB’s expectation that consumer inflation is set to moderate (despite the recent deceleration) and the MPC’s view that the policy rate is currently already restrictive. The MPC, however, emphasised that risks to inflation remain tilted to the upside.”

Against this backdrop, the MPC decided to keep the repurchase rate at its current level of 8.25% per year. The decision was unanimous. #SARBMPCNOV23 pic.twitter.com/Fys9v2vxPZ

— SA Reserve Bank (@SAReserveBank) November 23, 2023