MNI SARB Preview - Mar 2025: Considering Pause

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Executive Summary:

• Split consensus is leaning towards a pause at this meeting.
• Domestic developments could justify another 25bp cut.
• Elevated uncertainty may prompt the SARB to stand pat.

The South African Reserve Bank (SARB) may take a pause after a sequence of three consecutive 25bp interest-rate cuts as uncertainty around domestic fiscal policy and global trade tensions cloud the outlook. Although domestic conditions arguably leave room for another step in the monetary easing cycle, the SARB’s hawkish approach will likely prompt policymakers to err on the side of caution. Hawkish dissenting votes at the previous monetary policy meeting and Governor Kganyago’s comments on the possible fallout from global trade tensions suggested that the central bank may seek to consolidate progress in its fight against inflation – although it is a tough call and another cut cannot be ruled out.