FX.co ★ South Africa Keeps Key Interest Rate Unchanged at 7%

On September 18, 2025, the South African Reserve Bank maintained its key repo rate at 7%, in line with widespread expectations. The decision was not reached unanimously, as four members voted to keep the rates steady, while two advocated for a 25-basis-point reduction. Since last September, the rates have been lowered by 125 basis points, and the policymakers expressed their intention to pause in order to evaluate the effects on the economy, shifting expectations, and inflation risks. They observed that headline inflation has increased in recent months, as projected, and it is forecasted to rise in the forthcoming months, peaking around 4% before declining to 3%. The average inflation rate is expected to be 3.6% in 2026 and 3.1% in 2027. In addition, South Africa's economy experienced stronger-than-expected GDP growth last quarter, leading to an upward revision of the 2025 growth forecast to 1.2%, up from the prior estimate of 0.9%, despite the adverse impact of higher tariffs on exports.