MNI SARB Preview - Sep 2025: Target Reform Clouds Outlook

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Executive Summary:

• Most analysts expect the SARB to stand pat; a minority expect a 25bp cut.
• The broader inflation picture is fairly benign but headline CPI ticks higher.
• The ongoing inflation-target overhaul complicates monetary policy outlook.

The South African Reserve Bank (SARB) is expected to stand pat on interest rates this week, leaving the repo rate at 7.00% after a series of five sequential cuts interrupted by a brief pause in March. The inflation picture remains benign, as survey- and market-based measures confirm an ongoing moderation in inflation expectations, while a strong exchange rate weighs on import prices. However, current inflation is in a phase of cyclical upturn, which may encourage the Monetary Policy Committee (MPC) to sit on their hands as they remain under pressure to demonstrate credibility and resolve amid the ongoing inflation-target overhaul.