SARB cuts interest rates bringing joy for South Africans in debt
Governor Lesetja Kganyago announced the decision at a press briefing on Thursday, just one day before the deadline set by US President Donald Trump for nations to reach bilateral trade deals or face steep tariffs on exports to the US.
The SARB's Monetary Policy Committee (MPC), consisting of six members, were unanimous in making the decision
The rate cut comes amid mounting concerns over the potential economic fallout from Trump's trade deadline, which could impose a 30% tariff on South African exports to the US.
In a worst-case scenario, the SARB has estimated that such tariffs could reduce South Africa's GDP growth by as much as 0.6% and increase inflation by 0.4 percentage points.
Kganyago has also warned that up to 100 000 jobs could be lost in key industries such as agriculture and automotive, which are particularly vulnerable to global trade disruptions.
The SARB's decision to lower rates is seen as an effort to stimulate growth in light of South Africa's sluggish economy.
The South African Reserve Bank's monetary policy committee meets every second month to announce changes – if any – to the country's repo and prime lending rates.
The meetings in 2025 are scheduled to take place in January, March, May, July, September and November – and always on a Thursday at 15:00.
Currently, the committee comprises of six people, with Lesetja Kganyago holding the position of governor of the SARB – and the deciding vote if necessary.
The new repo rate now stands at 7% while the prime lending rate is 10.5%. Month Date Outcome January 30 January 25 basis point cut March 20 March No change May 29 May 25 basis point cut July 31 July 25 basis point cut September 18 September November 20 November
The table below shows the current monthly bond repayments on various bond values over a 20-year period assuming no deposit and repayments at prime.
It also shows the 'new' monthly bond repayments after the 25 basis point cut as well as what monthly saving will be. Bond Current New Saving R750 000 R7 614 R7 488 R126 R800 000 R8 122 R7 987 R135 R850 000 R8 629 R8 486 R143 R900 000 R9 137 R8 985 R152 R950 000 R9 645 R9 485 R160 R1 000 000 R10 152 R9 984 R168 R1 500 000 R15 228 R14 976 R252 R2 000 000 R20 305 R19 968 R337 R2 500 000 R25 381 R24 960 R421 R3 000 000 R30 457 R29 951 R516 R3 500 000 R35 533 R34 943 R590 R4 000 000 R40 609 R39 935 R684 R4 500 000 R45 685 R44 927 R758 R5 000 000 R50 761 R49 919 R842
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