SARB Governor sees upside risks to inflation to remain, adding that he expects CPI to return to the 3% target only in 2028; policy rates are moderately restrictive and consistent with the outlook

Guidance of this kind from a governor that pushes the return to target several years out is the classic inflation-hawkish profile, and in the smaller open economy setting it has historically been tied less to domestic demand than to the exchange rate: a central bank with a long target horizon is usually signalling that a weak currency is doing the inflating, which makes ZAR itself the tell. The phrase 'moderately restrictive' is doing deliberate work, since it frames current policy as appropriately placed rather than on a preset easing path, and in past episodes of this kind officials using that formulation have tended to sit on hold until the currency and administered prices stop working against them. The distinction worth drawing is between the headline CPI path and the items the bank can actually control: in this economy the usual suspects are food, fuel and administered utility tariffs, plus the rand pass-through, none of which respond cleanly to the policy rate, which is why the horizon stretches. Credibility history matters here, since this governor's tenure has been marked by a public push for a lower or more flexible target framework, so comments on the target itself carry structural significance beyond the near-term rate path. The follow-ons are the next MPC statement for whether the whole committee echoes the restrictive framing, the rand's behaviour around risk-off episodes, and any official movement on the target review, which in comparable frameworks has mattered more for the long end of the curve than any single meeting.