MNI SARB Review - Jan 2026: Better Outlook Fails To Bring Cut

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Executive Summary:

• By a 4–2 vote, the MPC opted to hold rates instead of delivering a 25bp cut.
• The language around the inflation outlook became more optimistic.
• Heightened uncertainty may have helped convince the MPC to stay put.

The South African Reserve Bank (SARB) left the repo rate unchanged at 6.75%, a slightly restrictive setting, with a couple of members breaking ranks in favour of a 25bp cut. The Monetary Policy Committee (MPC) took the decision to err on the side of caution despite the increasingly benign domestic inflation outlook, with headline CPI expected to ease off a cyclical peak reached in December and converge with the target by 2028. Heightened uncertainty around the external environment, some fading but still lingering domestic risks, and signs of modest concern about the sustainability of recent trends may have underpinned the decision to press pause for now and gather more information ahead of the March meeting.