The South African Reserve Bank holds interest rates steady despite easing inflation

SOUTH AFRICA - Report 25 Jan 2024 by Iraj Abedian

Having gathered for its first 2024 meeting this week, the South African Reserve Bank’s Monetary Policy Committee (MPC) announced its interest rate decision today. And in line with the recent US Fed decision as well as market expectations, the MPC once again voted to keep the benchmark interest rate unchanged at 8.25%. This marked the fourth consecutive meeting at which it did so. As such, the prime lending rate also remains at 11.75%.

As maintaining price stability is the Reserve Bank’s main priority according to its mandate, today’s decision is indeed in line with the country’s inflation trends. Not only is South Africa’s annual inflation below the Bank’s target band of 3% to 6%, but the latest figures show that inflation eased to 5.1% y/y in December 2023 from 5.5% y/y in November and 5.9% y/y in October. December 2023 also marked the seventh consecutive month during which annual consumer inflation remained below 6%.

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