Sarb warns of rate hikes if Iran war lasts another two months or more
Fact-Check Results
“The South African Reserve Bank (Sarb) warned on Thursday that monetary policy would be tightened later this year if the Iran war became a prolonged conflict, but held its key repo rate steady at 6.75% for now, leaving the prime rate unchanged at 10.25%.”
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INSUFFICIENT EVIDENCE
— No evidence found in archive to verify or contradict the claim about Sarb's warning and rate decisions.
“The Sarb’s Monetary Policy Committee (MPC) said in its statement: 'The first scenario assumes that the conflict lasts another two months or so, with oil prices averaging nearly $100 per barrel for this period and the rand about 5% weaker against the dollar.'”
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INSUFFICIENT EVIDENCE
— No evidence found in archive to verify or contradict the specific MPC scenario details.
“The Sarb’s MPC said in its statement: 'The second, more extreme scenario has the war lasting over a year, with oil prices staying above $100 per barrel and the rand 10% weaker.'”
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INSUFFICIENT EVIDENCE
— No evidence found in archive to verify or contradict the second scenario description.
“In both scenarios, inflation is higher, exceeding 4% in the first version and 5% in the second. Both call for higher interest rates this year, with one hike in the first scenario and several more in the other.”
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INSUFFICIENT EVIDENCE
— No evidence found in archive to verify inflation projections or rate hike specifics.
“The unfolding Middle East conflict and the disruption to global fuel supplies it has wrought have completely changed the economic landscape.”
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INSUFFICIENT EVIDENCE
— No evidence found in archive to verify the extent of economic landscape changes.
“Before the US and Israel launched attacks on Iran on 28 February, the outlook was for rate cuts this year, enabled by a benign inflation outlook.”
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INSUFFICIENT EVIDENCE
— No evidence found in archive to verify pre-attack rate cut expectations.
“Consumer price inflation (CPI) in February was 3% on an annual basis, bang in line with the Sarb’s new inflation target.”
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INSUFFICIENT EVIDENCE
— No evidence found in archive to verify February CPI figures or inflation target alignment.
“The ongoing Middle East conflict is a clear instance of a supply shock, which raises prices while weakening demand.”
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INSUFFICIENT EVIDENCE
— No evidence found in archive to verify supply shock classification of the conflict.
“The Sarb did not make a pre-emptive rate hike but pointedly said it needed to be alert to second-round effects, which are difficult to assess.”
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INSUFFICIENT EVIDENCE
— No evidence found in archive to verify Sarb's stance on second-round effects.
“In both scenarios, inflation exceeds the 'tolerance band' around the 3% inflation target.”
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INSUFFICIENT EVIDENCE
— No evidence found in archive to verify inflation tolerance band exceedance.
“The probability of the next monetary policy move being a hike has increased due to the Middle East conflict.”
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PENDING
“The Sarb maintains its 2026 economic growth forecast at 1.4%, but acknowledges downside risks to the outlook.”
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PENDING
“The MPC statement indicates that South Africans should prepare for accelerated inflation, slower economic growth, and potential interest rate increases.”
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PENDING