South Africa’s Reserve Bank (SARB) will decide on its interest rate stance this week on Wednesday (27 March)

Annual consumer inflation in South Africa for February 2024 was higher than expected, dampening optimism that the South African Reserve Bank (SARB) might reduce interest rates soon.

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Many analysts have shifted their first interest rate decrease expectations to the end of the year, with South Africans’ best hope this week being that interest rates remain unchanged.

According to Stats SA, inflation increased to 5.6% in February, from 5.3% in January and 5.1% in December. Most market experts predicted a flat or slightly higher reading of 5.3% to 5.4%, with only a few outliers anticipating a higher percentage. The higher-than-expected inflation reading contributed to the ‘higher for longer’ narrative surrounding interest rates.

“The inflation outlook is uncertain, and it’s been volatile. Until inflation stabilizes where we want it, at 4.5%, and is sustained there, we don’t see why we should change our monetary policy stance,”

Lesetja Kganyago, Reserve Bank Governor

To read the full article, visit: Interest rates in South Africa this week – the best you can hope for.

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