JOHANNESBURG, Jan. 29 (Xinhua) -- The South African Reserve Bank (SARB) on Thursday kept its benchmark repurchase rate unchanged at 6.75 percent, citing persistent inflation risks and heightened global uncertainty.
SARB Governor Lesetja Kganyago said four members of the Monetary Policy Committee voted to hold rates, while two supported a 25-basis-point cut.
The decision followed the release of December inflation data showing headline inflation edging up to 3.6 percent from 3.5 percent in November, which Kganyago described as the peak of inflation, with a gradual decline expected ahead.
"Our near-term inflation forecast has fallen, with the rand stronger and a lower oil price assumption. We are, however, keeping an eye on food inflation, especially meat prices, which are being affected by a serious outbreak of foot-and-mouth disease," the governor said, adding that electricity prices also pose risks, given that the National Energy Regulator of South Africa's price correction may rise from 54 billion rand (3.4 billion U.S. dollars) to 76 billion rand (4.8 billion dollars).
Kganyago said global risks remain elevated amid geopolitical tensions, rising public debt in major economies, threats to central bank independence, and safe-haven flows into gold, alongside concerns about a possible artificial intelligence asset bubble.
Domestically, he said that South Africa recorded four consecutive quarters of grow domestic product growth for the first time since 2018, largely driven by household consumption, while investment remained weak earlier in 2025 before recovering later in the year.
Noting that the inflation target range has recently been narrowed to 3-5 percent from 3-6 percent, Kganyago said the policy stance remains moderately restrictive, with interest rates expected to reach neutral levels around 2027.
"Our decisions will continue to be taken on a meeting-by-meeting basis, with careful attention to the outlook, data outcomes, and the balance of risks to the forecast," he added. ■