In a closely watched decision, the South African Reserve Bank (SARB) maintained its benchmark interest rate at 7% during its latest Monetary Policy Committee (MPC) meeting on Thursday. The outcome followed a split vote, with four members advocating for unchanged rates and two pushing for a 25 basis point reduction. This decision comes as headline inflation in South Africa unexpectedly decelerated to 3.3% year-on-year in August, down from 3.5% in July, hovering near the lower end of the central bank’s 3%-6% target range. Economists had anticipated a tight call between a rate hold and a modest cut, reflecting the delicate balance between supporting economic growth and managing inflationary pressures. In July, the SARB had reduced its policy rate by 25 basis points, signaling a shift in its inflation targeting strategy from aiming for the midpoint (4.5%) to the lower bound (3%) of its target range. The central bank’s cautious approach underscores its commitment to stabilizing inflation while navigating economic uncertainties. The decision is expected to influence borrowing costs, consumer spending, and investor confidence in Africa’s largest economy.