29/05/2026
THE SARB BREAKDOWN: Rates Up by 25 Basis Points
The South African Reserve Bank’s Monetary Policy Committee has increased the repo rate by 25 basis points to 7%, effective from today, 29 May 2026.
Governor Lesetja Kganyago announced a tight 4-2 split vote among the committee. The move comes as a direct response to intensifying inflation risks and overlapping economic shocks, designed to steer inflation back down toward the bank's 3% target.
The Three Main Risk Scenarios Addressed:
⚪Geopolitical Tension: A prolonged Middle East conflict pushing up oil and food prices while weakening the rand.
⚪Climate Pressures: The looming emergence of an El Niño weather pattern, historically bringing severe drought to South Africa.
⚪Non-Linear Impact: Outsized inflation shocks as agricultural businesses pass escalating diesel and fertiliser costs on to consumers.
What This Means for You:
Headline inflation is forecasted to average 4.4% this year and 3.7% next year, before finally landing back at the 3% target in 2028. Core inflation is also expected to peak early next year. Driven heavily by an 11.4% jump in fuel inflation and rising services costs (like insurance and transport), price pressures are mounting across the board.
For business owners, debt servicing costs tick upward today. If you haven't stress-tested your cash flow or reviewed your Q2 operational budget against a 7% repo rate, now is the time.
Let us help you recalibrate your financial strategy.