South Africa: SARB Preview—Rates on Hold Given Easing Inflation Pressures, in Finely-Balanced Decision

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South Africa: SARB Preview—Rates on Hold Given Easing Inflation Pressures, in Finely-Balanced Decision

Economics Research

15 July 2026 | 1:27PM BST

South Africa: SARB Preview—Rates on Hold Given Easing Inflation

Pressures, in Finely-Balanced Decision

Bottom Line: We expect an on-hold decision from the SARB given the restrictive Andrew Matheny

+44(20)7051-6069 |

policy stance and likely downward revisions to the SARB’s inflation outlook. However, andrew.matheny@gs.com

Goldman Sachs International

the Middle East situation remains uncertain and oil prices volatile, and the rise in Q2

inflation expectations was unwelcome. This implies that the decision is in our view

finely balanced (we anticipate a split vote and see some risks of a hike).

Main Points:

1. The SARB’s MPC will meet and announce its interest rate decision in a press

conference scheduled for 3pm SA time (2pm UK) on July 23. We expect an

on-hold decision, albeit likely resulting from a split vote. We recently shifted our

forecast from a hike to a hold, in response to dovish comments from Governor

Kganyago and a meaningful downward revision to our inflation forecasts.

2. Inflation developments since the May MPC meeting have been largely dovish. Oil

prices have moderated, the Rand has strengthened, and recent inflation prints

have surprised to the downside (with food inflation notably easing). Diesel and

fertilizer prices have also fallen, likely prompting the SARB to reduce its food

inflation forecast for next year (which it raised sharply in May). The overall level

of inflation (4.5% in May, 4.6% in June on our estimates) is high relative to the 3%

target, but we expect it to ease from July onwards on the back of fuel price

declines, and we anticipate downward revisions to the SARB’s forecasts. On the