Following a unanimous decision, the South African Reserve Bank has announced that it will leave the repo rate unchanged at 6.75% and the prime lending rate at 10.25%.

Governor Lesetja Kganyago stated that it is in the best interest of South Africans not to make any changes at this time, as tensions in the Middle East continue to pose economic uncertainty.

“In previous meetings we warned of elevated risks, and we have been proceeding cautiously in our rate settings. Now a crisis has hit. This prudent approach is proving appropriate.”

Kganyago signaled that interest rates could increase in the near future if geopolitical tensions in the Middle East continue to escalate.

The Governor highlighted that ongoing uncertainty in global markets, driven by potential disruptions to oil supply and broader economic instability, could have a knock-on effect on inflation and the domestic economy.

“Since our last meeting, the key event has been the outbreak of conflict in the Middle East. Prices for commodities like oil, gas, and fertiliser have moved sharply higher, while equity, bond, and currency markets have experienced broad losses, with only a few safe havens. We are just a few weeks into this shock, and conditions remain extremely uncertain. Global inflation is likely to rise in the near term, while growth will probably suffer from supply-chain disruptions and rising costs. But the longer-term outlook is less clear.”