SARB warns persistent oil shock and weaker rand raise second‑round inflation risk, keeps restrictive rate outlook

On 6 October 2026 the South African Reserve Bank said the risk of second‑round inflation effects had become more pronounced as oil prices stayed higher for longer and El Niño weighed on the outlook; it now expects inflation to return to the 3% target in Q4 2027 and signals a restrictive real policy rate through 2027–convergence to neutral from H2 2028.

A persistent oil price shock and a weaker rand increase imported inflation and raise the risk of generalised wage‑price effects. That backdrop makes the SARB more likely to keep policy restrictive for longer, which, if realised, would place upward pressure on short‑to‑medium domestic yields and bank funding costs and intensify FX‑mismatch exposure for corporates. Actual repricing depends on data and the November policy decision.

SARB final rate‑setting meeting in mid‑November 2026.