South Africa’s central bank governor Lesetja Kganyago announced that inflation is on track to meet the bank’s new target of 3% in 2026, with prices remaining stable.
The South African Reserve Bank (SARB) expects inflation to average 3.6% in 2025, with the new target range of 2-4% expected to be met a year earlier than initially forecast.
Kganyago stated that there is scope for further rate cuts, with the central bank’s main lending rate currently at 6.75%.
The SARB has lowered its inflation forecast for 2025 and 2026 to 3.3% and 3.5%, respectively, citing a more favorable inflation outlook.
The bank’s Quarterly Projection Model continues to forecast gradual rate cuts as inflation subsides.
The move towards a lower inflation midpoint has helped anchor expectations, reinforcing monetary credibility.
Analysts expect inflation to remain within the SARB’s target range, with some forecasting it to be around 3.5-3.8% in 2026.
