No interest rate relief for now

South Africa’s Monetary Policy Committee (MPC) yesterday kept interest rates on hold at 8.25% in its first meeting of the year, having left the benchmark rate unchanged at a 14-year high for the past nine months.To maintain the currency peg between the Namibian dollar and the rand, the Bank of Namibia (BoN) traditionally takes its monetary policy cue from the SARB. The repo rate in Namibia currently stands at 7.75%.The BoN’s first monetary policy meeting for the year is on 14 February.PSG Namibia only anticipates the BoN to cut its repo rate by 50 basis points to 7.25% in the second half of this year.“The Bank of Namibia (BoN) is tolerating a historically wide gap between the Namibian and South African repo rates due to concerns over the negative impact of fast-rising interest rates on consumers,” PSG Namibia said in its latest economic outlook.IJG Securities expects the BoN to maintain elevated rates in the first six months of this year, also expecting a monetary policy shift in the last half of 2024.UnanimousYesterday’s decision by the SARB was in line with economists' expectations.The decision was unanimous, with the MPC currently made up of five members after David Fowkes, who was appointed as an advisor to the governors on 1 December, was made part of the committee. The choice to maintain rates at a fourth consecutive MPC meeting comes after annual consumer price inflation (CPI) eased for a second month to 5.1% in December, the lowest since August last year and below economists' expectations of 5.2%."While headline inflation continues to ease in much of the world, core inflation [which excludes volatile fuel and food prices] remains sticky and high," SARB governor Lesetja Kganyago said in his presentation in Pretoria yesterday. The longer-term economic outlook is also uncertain, as geopolitical tensions and climate change threaten supply chains, output and prices. This uncertainty, alongside high interest rates and debt, will dampen investor appetite and capital flows, resulting in volatile financial markets and asset prices, he said. – Own report and Fin24

No interest rate relief for now

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Republikein 2026-02-23

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No interest rate relief for now

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