Renewed inflation pressures keep the SA Reserve Bank on the defensive

SOUTH AFRICA - Report 24 Sep 2026 by Iraj Abedian

The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) increased the policy rate by 25 basis points to 7.25% at its September meeting, effective from September 25, 2026. The decision, which was unanimous, follows the decision to leave rates unchanged in July and represents the second rate increase this year, following the 25-basis-point increase in May. The latest move reinforces the significant shift in the monetary policy cycle: after easing policy from the second half of 2024, the Bank has moved to a more restrictive stance during 2026 as successive global supply shocks have worsened the inflation outlook. The SARB noted that the escalation of geopolitical conflicts, disruptions to global energy supply and higher global interest rates have created an increasingly difficult environment in which inflation risks remain tilted to the upside.

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