The Monetary Policy Committee (MPC) has cut interest rates by 25 basis points, to a repo rate of 6.75%, with effect from 20 November.
Speaking to media on Thursday afternoon, Lesetja Kganyago, the Reserve Bank Governor, said this decision was unanimous.
“Members agreed there was scope now to make the policy stance less restrictive.”
This means South Africa’s inflation target was revised from a range of 3‒6% to a new point target of 3%, plus or minus 1 percentage point.
Kganyago also said the country’s growth forecast for this year, is revised slightly higher to 1.3%.
Various economists view this move as positive, such as Kobus Karyn, of the MDRT Foundation, who took to social platforms “we are closing 2025 on a strong and positive note. South Africa is finally off the greylist, our credit ratings have improved, and today the Reserve Bank announced a 25-basis-point interest rate cut, bringing prime down to 10.25 percent. A welcome relief heading into the festive season.”
Greef Properties said about the reduced prime rate, now at 10,25% “this reduction offers welcome relief for homeowners, buyers, and investors – making it an opportune moment to review your financing or explore new property opportunities.”
African Economy Inc said “the move marks a shift toward looser monetary conditions as inflation stabilizes within the newly set 3% target. The rate cut brings the repo down from 7%, reflecting the bank’s assessment that price pressures have eased enough to support a gradual adjustment.”
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