The latest developments on interest rates in South Africa indicate a period of rate cuts and some stability as the South African Reserve Bank (SARB) aims to support the economy and encourage borrowing. As of July 2025, the repo rate—the benchmark rate set by SARB—stands at 7.25%. This follows a 25-basis point cut on May 29, 2025, after a period of unchanged rates during the March meeting[1][3][5].
Economists, including Johann Els from Old Mutual, expect another 25-basis point rate cut at the upcoming July MPC meeting, citing subdued inflation and easing economic pressures. This would further relieve South African households and support economic growth, with inflation expected to remain below the SARB’s 3% to 6% target range for 2025. Consensus among key institutions suggests that the policy rate may fall to 6.5% by year-end if inflation remains contained and the SARB lowers its official target[2][3][5].
Recent rate cuts—totalling a 175-basis point reduction since September 2024 plus another 25-basis point cut in May 2025—have fueled a notable increase in credit demand. In May 2025, credit demand rose by 5.0%, exceeding both the previous month’s growth and market expectations. This increased activity mainly benefits consumer and business lending, though areas like mortgage advances remain weak due to structural constraints in the property market[4].
The SARB’s cautious stance aims to balance economic support with inflation control, particularly as inflation in June 2025 edged up only slightly to 3%. The next major policy decision is due on July 31, 2025, where further easing is widely anticipated if current trends continue[3][5].
According to Reserve Bank data as of July 22, 2025, the repo rate is confirmed at 7.25%, and the prime lending rate is 10.75%[7][8].
References
- [1] South Africa Interest Rate – Trading Economics
- [2] Interest rate cut coming for South Africa next week – Daily Investor
- [3] Big shift in interest rate expectations for South Africa – BusinessTech
- [4] South Africa’s recent interest rate cuts lead to a bigger-than-expected increase in borrowing by people and businesses – IOL
- [5] Big interest rate relief on the cards for South Africa – Daily Investor
- [7] Selected Historical Rates – South African Reserve Bank
- [8] Current Market Rates – South African Reserve Bank