South Africa Holds Interest Rate at 7.5% Amid Global Trade Uncertainty
TLDR
- South Africa’s central bank left its benchmark interest rate unchanged at 7.5%, pausing its easing cycle after three consecutive 25 basis point cuts
- The decision was driven by uncertainty surrounding global trade policy, particularly recent actions by U.S. President Donald Trump
- The bank now sees inflation averaging 3.6% in 2025 and forecasts economic growth of 1.7% in 2025, rising to 1.8% in 2026
South Africa’s central bank left its benchmark interest rate unchanged at 7.5%, pausing its easing cycle after three consecutive 25 basis point cuts. The decision was driven by uncertainty surrounding global trade policy, particularly recent actions by U.S. President Donald Trump.
Governor Lesetja Kganyago said four of six monetary policy committee members supported the hold. The decision aligns with the Federal Reserve's pause and reflects concerns about geopolitical risks and potential inflation pressures from global developments.
The rand weakened 0.4% against the dollar, while two-year bond yields fell three basis points to 8.23%. Inflation held steady at 3.2% in February, below expectations of 3.4%, supporting calls for further easing. However, rising trade tensions and diplomatic strain with the U.S. have added risk. The bank now sees inflation averaging 3.6% in 2025 and forecasts economic growth of 1.7% in 2025, rising to 1.8% in 2026. Its model indicates a benchmark rate of 7.25% by end-2025.
Daba is Africa's leading investment platform for private and public markets. Download here
Key Takeaways
The South African Reserve Bank is balancing low inflation and subdued growth against rising global risks. While steady inflation supports rate cuts, heightened geopolitical tensions — especially with the U.S. — have introduced caution. The decision to pause doesn’t rule out further easing but signals a data-driven approach tied to global developments. As a small, open economy, South Africa remains highly sensitive to external shocks, and future policy moves will depend on how global risks evolve.
Think someone else should see this?
To invest in this opportunity and other opportunities across Africa
Download the daba finance app on your mobile through
Take action.
Download app
Start investing in Africa’s best opportunities, including stocks, bonds, startups, venture funds, and more.
Partner with us
Unlock exciting business opportunities and growth potential.
Join Daba
Become a part of our vibrant community and enjoy exclusive benefits.
Contact us
Reach out to us for inquiries, support, or collaboration.