The South African Reserve Bank (SARB) has announced a cut to the repo rate by 25 basis points, bringing it down to 7%. This means the prime lending rate – the rate banks charge customers – drops to 10.5%.
The decision was announced by Reserve Bank Governor Lesetja Kganyago after the Monetary Policy Committee (MPC) met this week. The vote was unanimous.
Why Did They Cut the Rate?
The Reserve Bank says the economy is still under pressure despite signs of improvement in the second quarter of 2025.
Economic growth remains slow because of problems in logistics and other supply issues.
Business and consumer confidence has been weak for most of the year.
Inflation has been low, averaging about 3.3% this year, but is expected to rise slightly in the coming months.
With these factors in mind, the MPC decided to ease borrowing costs to support households and businesses.
What Does This Mean for You?
Home Loans and Vehicle Finance: Monthly repayments may go down slightly.
Personal Loans and Credit: Interest on existing and new loans could be lower.
Savings: Interest earned on savings accounts may decrease.
The cut comes as families continue to feel the pressure of rising living costs.
For many Diepsloot residents, this could bring some relief on loans and credit.
New Inflation Target Kganyago also revealed that the Reserve Bank is considering a new inflation target of 3%, down from the current range of 3%–6%.
He says this would help keep prices stable in the long term and strengthen the rand.
“With actual inflation close to 3%, we want to take the opportunity to achieve permanently lower inflation,” Kganyago said.
The SARB will work with National Treasury on these reforms.