FX.co ★ South Africa Holds Key Rate at 6.75% as Forecast

The South African Reserve Bank decided to maintain its key repo rate at 6.75% on January 29, 2026, aligning with widespread projections. This follows a 25 basis points reduction in November. The decision, however, was not unanimous; two committee members advocated for a 25-basis-point decrease. Policymakers acknowledged an improving inflation outlook but emphasized their goal of further reducing inflation expectations while remaining vigilant about possible price pressures, particularly from electricity tariffs. The SARB adjusted its inflation forecasts, reducing the estimate for 2026 to 3.3% from a previous 3.5%, while slightly increasing the forecast for 2027 from 3.1% to 3.2%. Governor Lesetja Kganyago indicated that inflation is anticipated to meet the new 3% target by 2028. The bank maintains its growth projections at 1.4% for the current year and 1.9% for the following year.