Interest rates: Economists split on whether SARB will cut or hold

Currently, analysts hold differing views on what the South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) will decide later this week.

Forward rate agreements suggest a 25 basis point cut, a prediction Bloomberg consensus also supports.

However, several local economists believe the MPC is just as likely to keep rates unchanged due to ongoing uncertainty in global markets.

The decision to hold rates at the most recent meeting in March was not unanimous, and another split vote is expected on Thursday, 29 May.

Four committee members voted to keep rates on hold, while two others preferred a 25 basis point cut.

Reminder

The SARB decided to keep interest rates unchanged when its Monetary Policy Committee met for the second time in 2025 on 20 March.

This decision left the repo rate at 7.5% and the prime lending rate at 11%.

Who are the SARB’s MPC?

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.

Monthly bond repayment table

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.

Should the SARB elect to keep rates on hold, there will be no change to the 11% monthly repayments.

However, if rates are cut by 25 basis points to 10.75%, these will be the new repayments as well as the monthly saving: