The South African Reserve Bank kept interest rates unchanged, with economists and property experts saying the decision provides certainty while warning that volatile oil prices remain the biggest risk to inflation and future rate decisions.
The South African Reserve Bank's (Sarb) decision to leave the repo rate unchanged at 7% has provided welcome certainty for consumers, homeowners and the commercial property sector, although economists cautioned that volatile oil prices remain the single biggest threat to South Africa's inflation outlook.
The Monetary Policy Committee (MPC) kept the prime lending rate at 10.5%, with four members voting to hold rates and two preferring a 25 basis point increase, highlighting the delicate balancing act facing policymakers.
The decision came despite inflation accelerating to 5% in June, largely driven by higher fuel prices linked to renewed conflict in the Middle East.
Arthur Kamp, chief economist at Sanlam Investments, said the Reserve Bank's updated inflation forecasts reflected a more favourable oil price outlook.
