SARB set to maintain interest rates amid political pressure

South Africa’s Reserve Bank (SARB) is anticipated to keep interest rates unchanged, according to economist Annabel Bishop.

Bishop says recent attempts by some members of the African National Congress (ANC) to pressure the bank into halting rate hikes have been labeled opportunistic, as markets have already predicted the end of the rate hiking cycle.

Finance Minister Enoch Godongwana addressed concerns about political interference, stating in a recent interview with Bloomberg TV that he has not met with the Reserve Bank Governor on the matter.

He also reaffirmed the bank’s independence, emphasising the importance of allowing the bank to make monetary policy decisions without external influence.

Inflation slightly down


Interest rates

Her forecasts indicate that the Reserve Bank is unlikely to hike interest rates this year or the following year. Bishop believes the bank has reached the end of its rate-hiking cycle, with the current interest rate being the highest it will go in South Africa. “That’s the market consensus as well, a fairly wide-held view,” she adds.

This consensus reflects the belief that the interest rates have reached their terminal point and are not expected to increase further.

The Reserve Bank’s decision on interest rates is eagerly awaited by businesses and investors, as it has significant implications for the country’s economic outlook.

As the political landscape undergoes changes in the lead-up to the election, the importance of preserving the central bank’s independence remains a key concern for economic stability.

Nearly half of South Africans face financial distress, relying on unsecured debts