SARB leaves key policy rate intact at 8.25%

The South African Reserve Bank left its benchmark repo rate at a 15-year high of 8.25% at its May policy meeting, in line with market consensus.

The central bank left borrowing costs on hold for the sixth meeting in a row after its rate-hiking campaign.

Despite that inflation outlook risks were seen as broadly balanced, policy makers said high inflation expectations required achieving the inflation objective sooner rather than later to re-anchor those expectations.

Annual headline inflation in South Africa has eased to 5.2% in April from 5.3% in March, but it still remained above the SARB target of 4.5%.

SARB policy makers now expect that inflation will decelerate to that level in the second quarter of 2025. Previously, the central bank had forecast the inflation target would be reached by the end of 2025.

The central bank kept its full-year 2024 inflation forecast at 5.1%. Its 2025 projection was revised down to 4.5% from 4.6% previously.

The South African Rand weakened 0.89% on the day against the US Dollar, with the USD/ZAR currency pair last trading at 18.6006.

Earlier in the session, the exotic Forex pair touched a fresh one-month high of 18.7620.