South African Reserve Bank Governor Lesetja Kganyago’s announcement of a 25 basis point rate cut on Thursday, 20 November 2025, offered another strong signal to investors of the South African economy’s resilience and sound management, Citadel says.
Source: The Banking Association of South Africa.
“We’ve had a whole wave of good news recently, from Standard & Poor’s (S&P) credit ratings upgrade and positive outlook for SA, the country exiting the greylist, a good budget speech last week which was well-received by the markets, the expectation of improved job numbers and a decent, low-inflation trajectory.
It therefore appears that, for the first time in a long time, SA is pulling the right levers to put the economy on a growth path and stimulate consumer spending,” Mike van der Westhuizen, portfolio manager at Citadel, said in response to the governor’s speech.
Looking at the factors that put “SA in a good place”, Van der Westhuizen said the relative stability of the Government of National Unity (GNU) was “another positive current signal to the global markets”.
Even more positive, however, was the apparent consensus and co-operation between the Sarb and the National Treasury about where inflation should be targeted. This followed Finance Minister Enoch Godongwana’s Medium-Term Budget Policy Statement (MTBPS) last week, during which he announced that SA’s inflation target was revised away from the 3-6% target range of the past 25 years, to 3% plus or minus 1%.
“Inflation and other risk factors seem to be largely under control both locally and globally and for the first time in a long time, we seem to be making the most of the positive local and global environment, on both the fiscal and monetary policy sides. We are in this environment doing what we can to push progress from a fiscal perspective and from a monetary perspective.”
Risk headlines and reality tell a different story
While headlines have been quite negative in the recent past, in the meantime, however, the rand and local bonds performed well, and this week, as we are hosting the G20 in Johannesburg, international sentiment is quite positive about SA.”
Speaking about Kganyago’s warning of a possible global artificial intelligence (AI) bubble burst — which could severely impact global markets, particularly emerging ones — Van der Westhuizen said Citadel considers this a low short-term risk. However, if such a collapse were to occur, he agreed that all assets perceived as high-risk, including SA bonds and equities, would be significantly affected.
“Perceived risks and the reality on the ground are not always the same and while risks of unexpected shocks are always there, it is good news that SA has positive momentum at the moment,” he said.
Now it all comes down to implementation
Vincent Masoloke, investment strategist and portfolio manager at Citadel, said it was now up to government to address “implementation risks” in its efforts to stimulate economic growth, which had been projected at 1.2% by the finance minister this week.
“Next, we need to unlock economic growth by more than 1.5%, even 2%. That means all eyes on the second phase of Operation Vulindela (the government’s action plan to modernise and transform network industries, including electricity, water, transport and digital communications).
"We have a positive base from which to operate, now we just need to get the implementation right.”
