The South African Reserve Bank's Monetary Policy Committee kept the repo rate unchanged at 6.75% on 29 January 2026, leaving the prime lending rate at 10.25%.
The decision was not unanimous. Four members of the committee voted to hold the rate, while two preferred a reduction of 25 basis points. The hold followed a 25 basis point cut to 6.75% at the committee's previous meeting on 20 November 2025.
NEW 3% INFLATION TARGET
The hold came as the Reserve Bank sought to anchor inflation expectations around its new 3% inflation target, which replaced the 3% to 6% target range previously in force. Headline consumer price inflation was 3.6% in December 2025 and averaged 3.2% over 2025. Goods inflation stood at 3%, with core goods inflation at 1.2%, while services inflation remained above 4%.
GLOBAL RISKS CITED
Governor Lesetja Kganyago pointed to a range of global uncertainties, including ongoing risks of an artificial intelligence bubble, unsustainable US fiscal deficits and the 30% tariff imposed by the United States on South African exports. Domestic risks identified included possible meat price pressures linked to foot-and-mouth disease and potential corrections to electricity prices.
Kganyago said the economy had recorded four consecutive quarters of expansion, which would mark the longest unbroken growth phase since 2018. Growth for 2025 was estimated at 1.3%, with forecasts showing it moving somewhat higher and approaching 2% over the medium term. He said the Reserve Bank's Quarterly Projection Model continued to forecast gradual rate cuts as inflation subsides.
At the time of the decision, the rand had strengthened to below R16 against the US dollar and the gold price had risen above $5,100 an ounce.