The South African Reserve Bank surprised markets by holding its repo rate steady at 7%, despite inflation climbing to 5% in June from 4.5% in May. Governor Lesetja Kganyago said policymakers judged the current stance to be sufficiently restrictive while acknowledging persistent upside risks from inflation, wage pressures, and volatile global oil prices. The central bank’s latest projections suggest interest rates will remain broadly stable through the rest of the year before gradually declining as inflation moves closer to its 3% target. Economists were divided over the decision, with some expecting a rate hike because of inflation concerns. However, commercial banks welcomed the move, saying stable borrowing costs would provide relief for households, support consumer confidence, and help sustain momentum in South Africa’s housing market.
Moneyweb