Repo Rate – After months of financial pressure on South African households, there’s a glimmer of hope. The South African Reserve Bank (SARB) has decided to hold the repo rate steady at 7.25% following its July 2025 Monetary Policy Committee (MPC) meeting. While this means no immediate relief, many economists believe that the central bank could announce a rate cut as early as September 2025 if inflation continues to cool. This decision comes amid signs of a weakening economy and easing consumer inflation, which recently dipped below the SARB’s upper 6% target for the first time in 15 months. While keeping the rate unchanged for now, the SARB is signalling a more dovish tone, raising expectations of reduced borrowing costs in the months ahead. For millions of South Africans struggling with bond repayments, credit card debt, and car loans, this could be the beginning of some financial breathing room. SARB Governor Lesetja Kganyago highlighted the balancing act between fighting inflation and supporting growth, noting that while inflationary pressures are softening, risks still remain due to global oil volatility and electricity costs. However, with GDP growth projections trimmed and household demand slowing, the pressure to support economic recovery is mounting. Here’s what this means for your home loan, car finance, personal debt—and your monthly budget.
Repo Rate Held at 7.25%: What It Means Right Now
SARB’s July decision keeps the benchmark lending rate unchanged, but signals possible cuts if economic indicators continue to soften.
- Repo rate remains: 7.25%
- Prime lending rate unchanged: 10.75%
- CPI inflation for June 2025: 5.9% (down from 6.3% in May)
- Inflation now within SARB’s 3–6% target range
- SARB warns of “upside risks” but hints at future flexibility
- No vote split: MPC voted 3-2 in favour of holding
- GDP growth revised to 0.6% for 2025 (from 1.1%)
- Global risk: Oil prices & electricity supply disruptions
SARB Governor’s Statement: Key Takeaways
Governor Kganyago’s address struck a cautious but optimistic tone, acknowledging easing inflation and weaker growth as reasons to consider easing policy soon.
- Inflation outlook “improved” for 2025 and 2026
- Risks remain around rand volatility and energy costs
- Food inflation expected to drop below 6% by Q4 2025
- Repo rate path may “moderate” if data continues improving
- MPC “will not hesitate to cut if justified by data”
Will the Repo Rate Be Cut in September 2025?
Experts say a rate cut is now more likely in the next MPC meeting if inflation remains stable or drops further.
| Expert Institution | September Cut Forecast? | Comments |
|---|---|---|
| Nedbank | Yes | 25bps cut likely if CPI stays under 6% |
| Standard Bank | Maybe | Waiting for Q3 growth and oil price trends |
| Investec | Yes | Predicts repo rate at 7.00% by October |
| PwC | Yes | Easing inflation supports cut |
| Momentum Investments | Maybe | Hints repo rate may remain flat till Nov |
| RMB | Yes | SARB “signalled room” for policy easing |
| FNB | Yes | Says “cut almost certain” if Eskom costs drop |
| Old Mutual | Yes | 50bps cumulative cut expected by end of 2025 |
September MPC Meeting: Key Factors to Watch
The SARB’s September 2025 meeting will depend on several domestic and global indicators.
- July & August inflation numbers
- Rand’s exchange rate volatility
- Global oil prices (Brent Crude above $85/barrel)
- Eskom’s generation costs & load shedding impact
- Wage negotiations in public sector
- Global interest rate trends (US Fed, ECB)
Impact on Borrowers: How Much You Could Save If Rates Are Cut
Even a modest cut could reduce the monthly burden for South Africans with debt.
| Loan Type | Current Rate | Possible Rate (After Cut) | Monthly Saving (on R1m loan) |
|---|---|---|---|
| Home Loan | 10.75% | 10.50% | ~R165 |
| Car Loan | 13.50% | 13.25% | ~R120 |
| Personal Loan | 18.00% | 17.75% | ~R180 |
| Credit Card APR | 20.00% | 19.75% | ~R200 (on R30,000 balance) |
| Student Loan | 11.25% | 11.00% | ~R90 |
| Microloan | 23.00% | 22.75% | ~R250 |
| Business Loan | 12.50% | 12.25% | ~R140 |
Household Budget Relief: What a Rate Cut Could Mean
A repo rate cut, even by 25bps, would ripple across consumer finances and potentially lift economic activity.
- Cheaper mortgage repayments for over 2 million borrowers
- Relief for indebted middle-class households
- Easier borrowing for small businesses
- Boost to construction and auto sectors
- Potential rise in household demand in Q4 2025
Inflation Cooling Down: Is It Sustainable?
June’s 5.9% CPI figure marks the lowest inflation print since early 2023, raising hopes that the worst is over.
| Category | May 2025 CPI | June 2025 CPI | Change |
|---|---|---|---|
| Food & beverages | 7.2% | 6.6% | -0.6% |
| Transport (fuel) | 11.1% | 9.4% | -1.7% |
| Electricity & water | 8.3% | 8.1% | -0.2% |
| Health | 5.1% | 4.9% | -0.2% |
| Education | 4.2% | 4.1% | -0.1% |
| Housing | 5.5% | 5.2% | -0.3% |
| Overall CPI | 6.3% | 5.9% | -0.4% |
Risks to Inflation Outlook: What Could Go Wrong?
While inflation is improving, SARB still flags several risks that could derail the easing trend.
- Crude oil prices climbing past $90/barrel
- New round of load shedding in Q3–Q4
- Municipal tariff hikes (electricity, water)
- Rand depreciation due to global shocks
- Drought or floods affecting food prices
Sector Reaction: How Industry Responds to the Repo Hold
Major sectors welcomed the hold, but all eyes are on September.
Banking Sector
- Banks say SARB’s credibility remains intact
- Some lenders already pricing in rate cut
- Variable rate loans likely to fall after next cut
Real Estate Sector
- Estate agencies expect property demand to pick up
- Bond approvals likely to rise if repo drops to 7.00%
- Middle-income buyers will benefit most
Retail and Auto Sectors
- Retailers see hope for consumer demand rebound
- Car dealerships expect 3–5% rise in finance-based sales
Agriculture & Manufacturing
- Input costs stable, but fuel and electricity still major concerns
- Slight improvement in producer margins expected
Department Contact for Queries and Complaints
For more details on the repo rate, personal finance concerns, or to submit complaints:
- South African Reserve Bank (SARB)
- Website: www.resbank.co.za
- Phone: 0800 627 700 (Toll-Free)
- Email: [email protected]
- National Credit Regulator (NCR)
- Website: www.ncr.org.za
- Phone: 0860 627 627
- Email: [email protected]
- Financial Sector Conduct Authority (FSCA)
- Website: www.fsca.co.za
- Phone: 0800 20 37 22
- Email: [email protected]
With inflation easing and growth slowing, the SARB has signalled that interest rate cuts may be on the horizon. While July’s hold gives no immediate relief, borrowers and businesses alike are watching September closely. If inflation continues its downward trend, South Africans could finally see some long-awaited relief in their budgets.
FAQs of Repo Rate
1. What is the current repo rate in South Africa?
The repo rate remains at 7.25% as of July 2025.
2. When is the next repo rate decision expected?
The next SARB MPC meeting is in September 2025.
3. Will a rate cut affect my existing home loan?
Yes, if your loan is on a variable rate, a repo cut will lower your monthly repayments.
4. Why hasn’t SARB cut the rate now?
Despite easing inflation, the SARB wants to see consistent improvement and monitor risks before making a cut.
5. What does a lower repo rate mean for ordinary people?
It means lower borrowing costs, which can reduce debt repayments and ease financial pressure on households.