Economists remain split on whether the South African Reserve Bank’s Monetary Policy Committee (MPC) will lower or maintain the repo rate at 7%, ahead of its final interest rate announcement of the year on Thursday afternoon.
The decision comes as inflation ticked slightly higher in October, rising to 3.6% from 3.4% in September. While the figure remains within the Bank’s target range, it has increased uncertainty about the direction the MPC will take in its final policy move for 2025.
Finance Minister Enoch Godongwana and several market analysts have expressed hope that the MPC will deliver a 25-basis-point cut to ease financial pressure on households and the economy.
However, SARB Governor Lesetja Kganyago has cautioned that any adjustments would remain dependent on inflation trends and broader global economic developments.
Economist Ulrich Joubert believes conditions may now allow for a rate cut.
“I anticipate that the Reserve Bank could cut its interest rate today,” said Joubert.
“We had a very positive medium-term budget statement by the Minister of Finance about a week ago, where he indicated that the government will really try and get its house in order, keep expenditure under control and keep the debt of the country under control. I think that is one of the major aspects that prevented the Reserve Bank from cutting interest rates over the past year or two, because they were worried about the fiscal side. The minister’s speech last week gave the indication that the government is going to try its best to control its fiscal side. So that is one point that is positive for cutting interest rates.”
Listen to the full interview with Ulrich Joubert below:
Meanwhile, trade unions are calling for more aggressive intervention.
The Congress of South African Trade Unions (COSATU) is demanding a cut of at least 50 basis points, arguing that years of rising lending costs have deepened the financial hardship faced by millions of low-income workers.
According to the federation, repeated increases to the repo rate have made life “unbearable” for households grappling with high food, energy and transport costs, and a stagnant job market.
The MPC’s decision will be announced this afternoon and is likely to set the tone for economic sentiment heading into 2026.
VOC News
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