The Reserve Bank’s Monetary Policy Committee decided to keep the repo rate stable at 8.25 percent on Thursday. This means that the interest rate remains at 11.75 percent.
There is also still hope that rate cuts will come in 2024, but nothing is guaranteed, as Reserve Bank Governor Lesetja Kganyago alluded to in the announcement on Thursday afternoon.
While the interest rate in SA may be high it is also important that South Africans have an idea of what other countries are facing when it comes to interest rates and inflation.
Here are some of our neighbours’s interest rates:
The Central Bank of Zambia raised its key interest rate by 50 bps to 10 percent at its meeting on August 23, according to Trading Economics.
Zambia’s government has increased the state’s key rate three times this year so far.
The Zambian central bank believes that Inflation is expected to average 10.2 percent in 2023 and 9.3 percent in 2024.
In July, the central bank of Mozambique kept the key MIMO interest rate unchanged at 17.25 percent.
Legislators said that they hope to keep inflation at single-digits in the medium run. They did note that the war in Ukraine and high public expenditure have played a role in the high-interest rate.
The central bank in Lesotho also kept the interest rate unchanged at their last meeting in August 2023. The rate is currently at 7.75 percent.
Botswana’s central bank had a meeting also in late August and chose to not increase the repo rate. Botswana’s interest rate is currently at 2.65 percent.
According to their central bank, Botswana’s objective inflation range is between three percent to six percent in the medium term.
“Inflation is forecast at 1.2 percent for August 2023 and the Monetary Policy Committee projects that inflation will remain below the lower bound of the objective range temporarily and revert to within the objective range from the first quarter of 2024 into the medium term,” Governor of the Bank Moses Pelaelo said in August.
In mid-August, Namibia’s central bank also chose not to increase or decrease the interest rate. The Namibian interest rate stands at 7.75 percent.
The central bank cited softening inflation pressures and the need to maintain a currency peg to the South African rand as its main reasons for the decision.
Namibia hiked up the interest rate by 50 basis points in June 2023.
The Tanzanian government had its monetary policy meeting in May this year. The country’s interest rate did not change and stands at five percent.
The country also chose to keep its interest rate unchanged at 7.5 percent in August 2023.