South Africans await the South African Reserve Bank’s (SARB) Monetary Policy Committee interest rate decision on 26 March, as global geopolitical tensions introduce uncertainty into the outlook for borrowing costs and the housing market.
Adrian Goslett, chief executive and regional director of REMAX Southern Africa, said the outlook for interest rates has become more complex in recent weeks as global developments could disrupt the downward trajectory many economists had anticipated for 2026.
“At the start of the year, there was growing optimism that South Africa would see further interest rate relief as inflation remained contained and economic growth stayed subdued. However, the current conflict has pushed oil prices sharply higher and could reintroduce inflationary pressures globally,” Goslett said.
“If those pressures filter through to local fuel prices and consumer costs, the South African Reserve Bank may choose to remain cautious rather than accelerate rate cuts.”
South Africa entered 2026 with the repo rate at 6.75% after the central bank began easing monetary policy in late 2025. Earlier forecasts suggested the possibility of additional rate cuts throughout the year as inflation stabilised and economic growth remained modest.
However, rising geopolitical tensions have added uncertainty. As South Africa relies heavily on imported fuel, higher global oil prices are likely to translate into increased transport and production costs that can filter through the broader economy. Economists have cautioned that sustained pressure on oil prices could raise inflation risks locally and complicate the outlook for further rate cuts.
“If global oil prices remain elevated or the rand weakens as a result of geopolitical tensions, SARB may opt to keep rates unchanged for longer while it monitors inflation risks. On the other hand, if the rise in oil prices and global tensions prove to be temporary, and local inflation remains well contained, SARB could still lower interest rates later in the year,” Goslett said.
For the property market, stability in borrowing costs is often as important as rate cuts. While further reductions would provide additional relief for homeowners and prospective buyers, a period of steady rates can also support market confidence and allow buyers to plan their finances with greater certainty.
