Reserve Bank Governor Lesetja Kganyago says four members of the MPC preferred to keep the rates on hold, whilst two favored a cut of 25 basis points. He made the announcement on Thursday (18/9). 

The announcement is in line with the prediction by Bureau of Economic Research (BER) chief economist Lisette Ijssel Schepper. She told OFM Business Hour on Monday (15/9) that the positive outcomes of their Inflation Expectations Survey, whilst a significant factor for the MPC, would likely not sway the committee to cut interest rates. That is because their survey is backward-looking and not forward-looking. 

Kganyago echoed this sentiment in his address when probed on whether the survey was not factored into their decision-making. De Schepper says Kganyago and the rest of the MPC focus on the future of inflation in the country, not the past. 

The announcement follows the latest inflation data by Statistics South Africa (Stats SA) on Wednesday (17/9), which reveals that the Consumer Price Index (CPI) year-on-year was 3,3% in August 2025, down from 3,5% in July 2025. Month-to-month, the CPI slowed by 0,1% in August.

The SARB Governor and the MPC are concerned about electricity and food prices, in particular, meat and vegetables. 

Headline inflation has picked up in recent months which was broadly expected. The pressure is coming mainly from meat and vegetables, as well as fuel prices, which have been declining at a slower pace than they were before. #SARBMPCSEP25 pic.twitter.com/txMhGMOtgG

— SA Reserve Bank (@SAReserveBank) September 18, 2025

Economic growth forecast

Kganyago kicked off his address by saying the global economy appears resilient so far. “While the geopolitical environment remains difficult, and trade disruptions continue, growth is holding up, and market volatility has subsided.

“Since our last meeting, policy rates have been cut in the United States and the United Kingdom, and the dollar has weakened. Various commodity prices have risen, although oil prices remain contained. These conditions are supportive for emerging markets like South Africa.” 

The SARB noted last week’s positive albeit surprising economic growth data, which was the highest quarterly growth rate in two years at 0.8%. They therefore have marked up their growth forecast for the year from 0.9% to 1.2%.

Inflation expectations moving forward 

As mentioned, the BER’s Inflation Expectations Survey showed that analysts, businesspeople, senior representatives of trade unions, and households are feeling positive about inflation moving forward. 

During the third quarter of 2025, these three social groups lowered their longer-term inflation expectations in the next five years to an average 4.2%. 

This is 0.2 percentage points lower than during the second quarter, and the lowest rate on record.

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