{"id":836007,"date":"2025-08-26T13:00:00","date_gmt":"2025-08-26T11:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=836007"},"modified":"2025-08-26T13:10:52","modified_gmt":"2025-08-26T11:10:52","slug":"what-to-expect-from-interest-rates-in-south-africa-for-the-rest-of-the-year","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/836007\/what-to-expect-from-interest-rates-in-south-africa-for-the-rest-of-the-year\/","title":{"rendered":"What to expect for interest rates in South Africa for the rest of the year"},"content":{"rendered":"\n

Experts have noted that South Africa will likely see no more interest rate cuts for the rest of the year as inflation remains a concern.<\/p>\n\n\n\n

Stats SA\u2019s latest data showed consumer price inflation rising to 3.5% in July, up from 3% in June. <\/p>\n\n\n\n

While this is still well within the Reserve Bank\u2019s target range of 3% to 6%, the trend is upwards. The increase came mainly from food and utilities, with sharp price hikes in meat and vegetables. <\/p>\n\n\n\n

Municipal tariffs also played a big role. Water charges rose by 12.1% this year compared to 7.5% last year, while electricity went up by 10.6%. <\/p>\n\n\n\n

Refuse collection and sewage removal were added to the inflation basket this year, and both rose by more than 6%. Without these increases, inflation would have been just 3.1%.<\/p>\n\n\n\n

Adrian Pask, Chief Investment Officer at PSG Wealth, said that although inflation is still low, the upward direction makes it harder for the Reserve Bank to cut rates.<\/p>\n\n\n\n

Pooja Tanna from Perpetua Investment Managers agreed<\/a> that the Reserve Bank is likely to keep rates unchanged. <\/p>\n\n\n\n

\u201cInflation printed at 3.5%, but you need to remember it was in line with expectations. We could see that food inflation had spiked,\u201d she said. <\/p>\n\n\n\n

She added that much of the pressure came from government-controlled prices, like electricity, water, and rates. Despite this, Tanna does not expect inflation to rise sharply. <\/p>\n\n\n\n

\u201cI see the ceiling sort of between 3.8% and 3.9% into year-end. I don\u2019t think it reaches 4% by the end of the year. We\u2019re already seeing the easing of price pressures in food inflation,\u201d she said. <\/p>\n\n\n\n

For that reason, she expects the Reserve Bank to sit tight. \u201cI think you get a pause in September and you get a pause in November again,\u201d she said.<\/p>\n\n\n\n

Although no interest rate cut is not good news, Tanna also does not believe interest rate hikes are likely. \u201cI don\u2019t think they\u2019ll be talking about interest rate hikes. I think the pause is definitely there,\u201d she said.\u00a0<\/p>\n\n\n\n

Still a small chance for a cut <\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

But some economists believe there may still be a chance of a rate cut if the United States Federal Reserve lowers its own rates again this year. <\/p>\n\n\n\n

Global financial markets are betting on this after Fed chair Jerome Powell signalled that more cuts are likely.<\/p>\n\n\n\n

Investec chief economist Annabel Bishop said markets had worried that higher US tariffs would push inflation higher and delay cuts, but Powell\u2019s comments gave some reassurance. <\/p>\n\n\n\n

\u201cMarkets now expect two more cuts this year in US interest rates, with a high probability of a third,\u201d she said. <\/p>\n\n\n\n

This expectation has already weakened the dollar and strengthened the rand, because lower US rates make South Africa\u2019s higher-yielding bonds more attractive to investors.<\/p>\n\n\n\n

Nedbank\u2019s chief economist, Nicky Weimar, explained<\/a> that if the Fed cuts rates, South Africa could follow. <\/p>\n\n\n\n

\u201cInflation in the country is largely under control, despite a higher reading in July, and, combined with the rand\u2019s recent strength, could give the Reserve Bank room to cut,\u201d she said.<\/p>\n\n\n\n

Weimar stressed that a cut would help households under pressure from rising living costs. Consumer spending has been surprisingly strong this year and has been a key driver of economic growth. <\/p>\n\n\n\n

\u201cSouth African consumers want to spend, and do so, but need more help to do so consistently, which could come from easing inflation and lower interest rates,\u201d she explained.<\/p>\n\n\n\n

She added that this is especially important because local producers are struggling. Global growth is slowing, and higher US tariffs on South African exports are adding to the strain. <\/p>\n\n\n\n

At home, producers face high costs from electricity and logistics, making it hard to compete internationally.<\/p>\n\n\n\n

This means households, not companies, are doing much of the work to keep the economy moving. For that reason, an interest rate cut later this year could provide a welcome boost.<\/p>\n\n\n\n

Despite this, the most likely outcome for now is that the Reserve Bank will hold rates steady. Inflation is edging higher, and the SARB has made it clear that keeping inflation close to 3% is its priority.\u00a0<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Several experts have noted their expectations for interest rates in South Africa for the rest of 2025.<\/p>\n","protected":false},"author":92,"featured_media":836010,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[2922,1799,23462,11232,3619,853,1809],"class_list":["post-836007","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-interest-rates","tag-nedbank","tag-perpetua-investment-managers","tag-psg-wealth","tag-sarb","tag-south-africa","tag-stats-sa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/836007","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=836007"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/836007\/revisions"}],"predecessor-version":[{"id":836016,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/836007\/revisions\/836016"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/836010"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=836007"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=836007"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=836007"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}