South Africa’s interest rates have seen notable developments in recent months, with the South African Reserve Bank (SARB) cutting the repo rate by 25 basis points to 7.25% on May 29, 2025, in response to a more favorable inflation outlook and a desire to support the faltering economy[1]. This adjustment followed a period of holding rates, as policymakers balanced economic risks and an improving inflation scenario.
The SARB’s next Monetary Policy Committee (MPC) rate-setting meeting is scheduled for July 31, 2025. With inflation having ticked up slightly to 3% in June (from 2.8% in May), analysts at Goldman Sachs and Investec believe there is “room for the central bank to cut interest rates at each of its three remaining meetings this year,” possibly lowering the repo rate to 6.5% by year-end if the inflation target is not changed[4]. The central bank’s prime lending rate currently stands at 10.75%[6].
Old Mutual’s chief economist Johann Els also expects the SARB to cut rates by another 25 basis points at the July 2025 meeting, pointing to already subdued inflation, stable household debt, and improved consumer finances as key drivers. Lower rates are seen as freeing up disposable income and stimulating consumer spending, which has contributed positively to economic growth[2].
Despite the positive outlook for rate cuts, some uncertainty lingers due to global factors. The recent shift in US trade policy, including new tariffs on South African exports effective August 1, has re-introduced inflation risk and market volatility, potentially complicating the SARB’s decision-making. Nevertheless, most analysts expect at least one more 25 basis point cut in 2025, with the possibility of further gradual reductions into 2026 as long as inflation remains anchored within or below the SARB’s target range of 3–6%[3].
Currently, the repo rate is 7.25% and the prime lending rate is 10.75% as of late July 2025[6][7]. The SARB’s rate changes are reflected in other linked financial products and credit categories as administered by the South African Revenue Service[5].
References
- [1] South Africa Interest Rate – Trading Economics
- [2] Interest rate cut coming for South Africa next week – Daily Investor
- [3] Interest rate hope for South Africa – BusinessTech
- [4] Big shift in interest rate expectations for South Africa – BusinessTech
- [5] Tables of Interest Rates | South African Revenue Service
- [6] Selected Historical Rates – South African Reserve Bank
- [7] Current Market Rates – South African Reserve Bank