Only the Swiss National Bank (SNB) bucking the trend and lowering its interest rate once more.
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The South African Reserve Bank's decision to keep rates on hold was in line with the general global monetary policy trend.
"As expected, the SA Reserve Bank (SARB) just announced that it would keep the repo rate unchanged," said Lisette IJssel de Schepper, chief economist at the Bureau for Economic Research (BER)
“While inflation expectations remain anchored and the inflation outlook is also relatively benign, the SARB remains concerned about potential upside risks to inflation and deemed it prudent to hold policy settings unchanged.
"For now, we suspect that should there be more certainty and continued favourable developments (US Fed cuts, lower oil prices and a stronger rand), the SARB may cut rates again later in the year,” De Schepper said.
The chief economist said only the Swiss National Bank (SNB) bucked the trend and lowered its interest rate once more.
“The policy rate is now at 0.25%, but the general expectation is that it will remain at this level for some time, with the risk of negative interest rates deemed relatively low.
"The Bank of Japan (BoJ) kept rates steady early in the week (the ‘other’ option would have been a hike, the BoJ going against most other global central banks as it is tightening policy).
"The Bank of England (BoE) kept its monetary policy settings unchanged and turned a little less dovish about the path going forward amid sustained concerns about inflation.
"There was also no change announced by the Swedish Riks Bank, as was widely expected.
"The People’s Bank of China decided to keep benchmark lending rates for Chinese banks unchanged for a fifth straight month, as officials leave open room for stimulus in the likely case that US tariffs rise again.
"Finally, the US Federal Reserve (Fed) kept its interest rate unchanged but dialled back the pace of quantitative tightening. The international section has the details about how the Fed lifted its inflation forecast and lowered growth.
"Meanwhile, amid growing concerns about the US economy, the Eurozone's story is turning more positive. Germany’s parliament approved chancellor-in-waiting Friedrich Merz’s plan to ramp up military and infrastructure spending by about €1 trillion,” De Schepper said.
BER said a broader trend of 2025 has been that amid increased worries about the strength of the US economy, markets have started to reprice in rate cuts for later in the year. This has helped weaken the dollar and support the rand, it said.
On Wednesday, Neil Gopal, CEO of the South African Property Association(SAPOA), said the SARB was likely to follow what the US Federal Reserve does.
“However, given that South African February inflation numbers came in at 3.2%, unchanged from January, one would expect a .25 basis point decrease in rates. A drop would certainly help stimulate the markets,” Gopal said.
Professor Waldo Krugell, an economist from the Faculty of Economic and Management Sciences at the North-West University said the MPC decided to keep the repo rate unchanged at 7.5% this afternoon.
He said that yesterday the Fed (Federal Open Market Committee) of the US also decided to keep their policy rate unchanged.
“Domestically the inflation outlook is benign. The inflation rate then remained unchanged at 3.2% in February and the core inflation rate stands at 3.4%. Goods inflation was slightly up from 2.4% to 2.5% and services inflation was slightly down from 4% to 3.8%.
"In addition, a recent survey shows that inflation expectations are lower for this year, the rand is relatively strong and the oil price is low. Even the VAT rate increase of 0.5 percentage points is likely to increase inflation by only 0.1 to 0.2 percentage points.
"Overall, policy is contractionary and the real prime rate is about 150 basis points higher than it was before the Covid-19 pandemic. Their concern is that international volatility and a trade war skews the risks to the upside,” Krugell said.
The next MPC meeting is in May.
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