The South African Reserve Bank raised its benchmark repo rate by 25 bps points to 6.75 percent on November 22nd 2018, surprising markets who expected no changes. It is the first hike in borrowing cost since March 2016, amid a rise in the inflation trajectory which continues to deviate from the mid-point of the target range. Policymakers said the decision is accommodative and that monetary policy actions will continue to focus on anchoring inflation near the target range mid-point. Interest Rate in South Africa averaged 12.56 percent from 1998 until 2018, reaching an all time high of 23.99 percent in June of 1998 and a record low of 5 percent in July of 2012.

Interest Rate in South Africa is expected to be 6.75 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in South Africa to stand at 7.00 in 12 months time. In the long-term, the South Africa Interest Rate is projected to trend around 7.50 percent in 2020, according to our econometric models.

South Africa Interest Rate
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Calendar GMT Actual Previous Consensus TEForecast
2018-05-24 01:00 PM Interest Rate Decision 6.5% 6.5% 6.5% 6.5%
2018-07-19 01:00 PM Interest Rate Decision 6.5% 6.5% 6.5% 6.5%
2018-09-20 01:10 PM Interest Rate Decision 6.5% 6.5% 6.5% 6.5%
2018-11-22 01:00 PM Interest Rate Decision 6.75% 6.5% 6.5% 6.5%
2019-01-17 01:00 PM Interest Rate Decision 6.75%
2019-03-28 01:00 PM Interest Rate Decision
2019-05-23 01:00 PM Interest Rate Decision



South Africa Hikes Interest Rate to 6.75%



The South African Reserve Bank raised its benchmark repo rate by 25 bps points to 6.75 percent on November 22nd 2018, surprising markets who expected no changes. It is the first hike in borrowing cost since March 2016, amid a rise in the inflation trajectory which continues to deviate from the mid-point of the target range. Policymakers said the decision is accommodative and that monetary policy actions will continue to focus on anchoring inflation near the target range mid-point.

Excerpts from the statement by Governor Lesetja Kganyago:

The inflation forecast has improved marginally since the previous MPC. While remaining within the inflation target range throughout the forecast period, the SARB’s model projects an increase in headline inflation, albeit slightly lower than the September projection. Headline inflation is now expected to average 4.7% in 2018 (down from 4.8%), before increasing to 5.5% in 2019 (down from 5.7%) and moderating to an unchanged 5.4% in 2020. Headline CPI inflation is now expected to peak at around 5.6%, in the third quarter of 2019. The forecast for core inflation is 4.3% in 2018 (down from 4.4%), 5.3% in 2019 (down from 5.6%) and 5.5% in 2020. These inflation projections are based on an interest rate path generated by the SARB’s Quarterly Projection Model (QPM).

The domestic growth outlook remains challenging. Recent monthly data on economic performance in key sectors suggests a more moderate recovery in growth in the third quarter than expected in September. The SARB now forecasts growth in 2018 to average 0.6% (down from 0.7% in September). The forecast for 2019 and 2020 is unchanged at 1.9% and 2.0% respectively. At these growth rates, the negative output gap is wider than at the time of the previous MPC meeting. The output gap will narrow but will not close by the end of 2020, as previously expected.

The MPC assesses the risks to the growth forecast to be moderately on the downside. As previously highlighted the Committee remains of the view that current challenges facing the economy are primarily structural in nature and cannot be solved by monetary policy alone. Prudent macroeconomic policies are essential to ensuring that growth is sustainable and that the economy is more resilient to shocks. These should be complemented by implementation of credible structural policy initiatives that make a marked impact on the cost structure of the economy, potential output and employment.

The MPC noted the rising inflation trajectory which, while remaining within the target range, continues to deviate from the mid-point of the target range. The MPC continues to assess the risks to the longer-term inflation outlook to be on the upside. These risks include tighter global financial conditions, a weaker exchange rate, higher wage growth, international oil prices and rising electricity and water tariffs. However, demand pressures are still not assessed to pose a significant risk to the inflation outlook.

The MPC had to decide whether to act now or later. Given the relative stability in the underlying core inflation measure, delaying the adjustment could give the MPC room to re-assess these unfolding developments in subsequent meetings. However, delaying the adjustment could cause inflation expectations to become entrenched at higher levels and thus contribute to second round effects, which would require an even stronger monetary policy response in the future.

Against this backdrop, the MPC has decided to increase the repurchase rate by 25 basis points to 6,75% per year, effective from 23 November 2018. Three members preferred an increase and three members preferred an unchanged stance.


SARB | Stefanie Moya | stefanie.moya@tradingeconomics.com
11/22/2018 1:48:51 PM



South Africa Money Last Previous Highest Lowest Unit
Interest Rate 6.75 6.50 23.99 5.00 percent [+]
Interbank Rate 7.15 7.15 16.96 5.06 percent [+]
Money Supply M0 259427.00 255731.00 259427.00 415.00 ZAR Million [+]
Money Supply M1 1723521.00 1758710.00 1758710.00 1482.00 ZAR Million [+]
Money Supply M2 2842764.00 2866633.00 2866633.00 2887.00 ZAR Million [+]
Money Supply M3 3501132.00 3532734.00 3532734.00 4796.00 ZAR Million [+]
Foreign Exchange Reserves 50672.00 50166.00 51889.00 5316.00 USD Million [+]
Banks Balance Sheet 5471192.00 5415036.00 5471192.00 114781.00 ZAR Million [+]
Loans to Private Sector 3610412.00 3609385.00 3610412.00 4051.00 ZAR Million [+]
Deposit Interest Rate 7.25 7.17 18.86 5.15 percent [+]
Lending Rate 10.00 10.00 25.50 5.00 percent [+]
Central Bank Balance Sheet 774584.00 817542.00 817542.00 543.00 ZAR Million [+]


South Africa Interest Rate

In South Africa, the interest rates decisions are taken by the South African Reserve Bank’s Monetary Policy Committee (MPC). The official interest rate is the repo rate. This is the rate at which central banks lend or discount eligible paper for deposit money banks, typically shown on an end-of-period basis. This page provides - South Africa Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. South Africa Interest Rate - actual data, historical chart and calendar of releases - was last updated on December of 2018.

Actual Previous Highest Lowest Dates Unit Frequency
6.75 6.50 23.99 5.00 1998 - 2018 percent Daily




Country Last Previous
Argentina 59.41 Dec/18
Turkey 24.00 Dec/18
Mexico 8.00 Nov/18
Russia 7.75 Dec/18
South Africa 6.75 Nov/18
Brazil 6.50 Dec/18
India 6.50 Dec/18
Indonesia 6.00 Nov/18
China 4.35 Nov/18
Saudi Arabia 2.75 Nov/18
United States 2.25 Nov/18
Singapore 1.97 Nov/18
Canada 1.75 Dec/18
South Korea 1.75 Nov/18
Australia 1.50 Dec/18
United Kingdom 0.75 Nov/18
Euro Area 0.00 Dec/18
France 0.00 Dec/18
Germany 0.00 Dec/18
Italy 0.00 Dec/18
Netherlands 0.00 Dec/18
Spain 0.00 Dec/18
Japan -0.10 Nov/18
Switzerland -0.75 Dec/18


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