JOHANNESBURG, March 26 (Xinhua) -- The South African Reserve Bank (SARB) on Thursday kept its repurchase rate unchanged at 6.75 percent, citing heightened uncertainty in the global outlook amid tensions in the Middle East.
SARB Governor Lesetja Kganyago said the conflict in the Middle East has pushed up prices of oil, gas and fertilizer, while triggering losses across equity, bond and currency markets.
"Against this backdrop, the committee decided to keep the policy rate unchanged," he said, noting the decision was unanimous.
Major central banks have generally kept rates unchanged, as they wait for more information, the governor said, adding that markets have largely dropped expectations for rate cuts in major economies, and probabilities of rate hikes have risen.
"Global inflation will be higher in the near term, while growth will probably suffer from supply-chain disruptions and rising costs," he added.
Noting the country's inflation stood at 3 percent in February, with core inflation also at 3 percent, within the target range, Kganyago said the bank expects headline inflation to rise to 4 percent in the second quarter, driven partly by fuel inflation above 18 percent.
According to the latest data, the South African economy grew further in the fourth quarter of 2025, with output rising by 1.1 percent for the year as a whole.
"This is better than recent years but still well below longer-run averages. We have been encouraged by green shoots such as rising confidence and stronger investment," Kganyago said, warning that the Middle East conflict could trigger supply shocks and disrupt the growth recovery.
