{"id":843034,"date":"2025-11-13T10:00:00","date_gmt":"2025-11-13T08:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=843034"},"modified":"2025-11-13T10:24:29","modified_gmt":"2025-11-13T08:24:29","slug":"good-news-about-interest-rates-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/843034\/good-news-about-interest-rates-in-south-africa\/","title":{"rendered":"Good news about interest rates in South Africa"},"content":{"rendered":"\n

The South African Reserve Bank is widely expected to cut interest rates next week, with further rate cuts anticipated in the future, given South Africa\u2019s lower inflation target. <\/p>\n\n\n\n

The Reserve Bank\u2019s Monetary Policy Committee (MPC) meeting on November 20 is expected to result in a 25-basis-point cut. <\/p>\n\n\n\n

Market expectations (the Forward Rate Curve) show a roughly 80% likelihood of a cut taking place next week. <\/p>\n\n\n\n

However, Annabel Bishop, Chief Economist at Investec, warned that the SARB may choose not to ease the repo rate at its last MPC meeting of the year. <\/p>\n\n\n\n

This is due to the US Federal Reserve signalling that it is unlikely to cut its interest rates again this year, given the reduced data publications in the US resulting from the government shutdown.<\/p>\n\n\n\n

Moreover, inflation ticked higher in Q3 2025, reaching 3.4% in September, and is expected to be near 3.5% in Q4 2025, which is higher than the 3.0% inflation target.\u00a0<\/p>\n\n\n\n

\u201cHowever, the SARB has made it clear that it will be flexible in achieving the inflation target this year and next,\u201d said Bishop. <\/p>\n\n\n\n

\ufeff\ufeffThe MPC became less dovish in September as it raised its inflation forecasts slightly, to 3.4% for this year (previously. <\/p>\n\n\n\n

While the door remains open for a 25 basis point cut next week, Bishop noted that expectations have faded somewhat after a shift in tone from the dovish tone in the July MPC meeting to a more hawkish one.\u00a0<\/p>\n\n\n\n

On the other hand, Tatonga Rusike, Bank of America\u2019s (BofA) Global Research Sub-Saharan Africa Economist, said that the latest inflation data has opened the door for a 25-basis-point cut in November. <\/p>\n\n\n\n

Rusike noted that the inflation data for August and September actually came in below expectations, and that two of the six members of the MPC voted for a 25 basis point cut at the September meeting. <\/p>\n\n\n\n

While four members voted for a hold, the vote showed that a minority was ready to cut interest rates.\u00a0<\/p>\n\n\n\n

BofA believes that following the cut in November, there will likely be a pause in further rate cuts until the second half of 2026. <\/p>\n\n\n\n

The Reserve Bank has slowly cut rates over the last 14 months, with the repo rate lowered from 8.25% to 7.00% amid significantly lower inflation figures. The expected cut is expected to bring the repo rate to 6.75%.\u00a0<\/p>\n\n\n\n

New inflation target <\/h2>\n\n\n
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The SARB has seen a significant victory after Finance Minister Enoch Godongwana announced a lower inflation target at Wednesday\u2019s Medium-Term Budget Policy Statement.\u00a0<\/p>\n\n\n\n

The SARB had pushed for a lowering of the inflation target, claiming that the prior range of 3% to 6% was too broad and made South Africa uncompetitive with its largest trading partners. <\/p>\n\n\n\n

Godongwana lowered the target to 3%, with a 1 percentage point band to allow for regular economic fluctuations. <\/p>\n\n\n\n

Notably, the MPC has already based its most recent decisions on a 3% inflation target, as it was already at the lower end of the 3% to 6% range. <\/p>\n\n\n\n

The SARB stated that the lower inflation target will lead to lower interest rates in the future, which could boost economic growth while also keeping price increases in line with those of other nations. <\/p>\n","protected":false},"excerpt":{"rendered":"

The South African Reserve Bank (SARB) is widely expected to cut interest rates next week, with more cuts expected in the medium term. <\/p>\n","protected":false},"author":95,"featured_media":843035,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[5349,1498,3619],"class_list":["post-843034","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-bank-of-america","tag-investec","tag-sarb"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843034","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\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=843034"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843034\/revisions"}],"predecessor-version":[{"id":843044,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843034\/revisions\/843044"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/843035"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=843034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=843034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=843034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}