With just days to go before the South African Reserve Bank (SARB) makes its next big move on interest rates, tension is rising across the country.
Will the central bank keep things steady, or will it go for another rate cut to help ease pressure on the economy? While most signs point to a pause, some analysts aren’t ruling out a surprise cut.
Will SARB Play It Safe or Make a Bold Move?
Economists are split right down the middle.
Some believe the SARB will hold off on making any changes this Thursday, July 31, while others think conditions are right for a modest 25 basis point cut.
That uncertainty is fueled by a shaky global environment — especially the looming threat of new U.S. tariffs on South African exports, which are set to kick in on August 1.
What the Big Banks Are Saying
Experts at FNB and Investec are leaning toward a cautious approach.
They think SARB will wait until September before making another move, especially with global markets acting up and trade tensions rising.
FNB noted that the threat of Donald Trump’s incoming tariffs and overall instability will likely nudge the bank to play it safe for now.
But not everyone agrees. Analysts at Nedbank and Bank of America say the time for a cut is now.
With inflation sitting comfortably at the lower end of the SARB’s 3%–6% target range, they believe there’s room to ease monetary policy without risking runaway prices.
Bank of America even stated in a recent note that there’s no clear inflationary pressure holding the bank back.
A Look Back at Recent Decisions
So far this year, the SARB has already cut rates twice — by 25 basis points in both January and May — following two cuts in late 2024.
But in March, the bank pressed pause, citing global risk and political tension tied to South Africa’s 2025 Budget.
That March decision sent a strong signal: the SARB isn’t rushing into things.
It wants to protect stability, especially in a fragile economic landscape.
This makes Thursday’s vote particularly interesting — it’s expected to be tight, with policymakers carefully weighing the risks of moving too quickly or too slowly.
The Trump Tariffs Are a Major Wild Card
One of the biggest unknowns is the so-called “Liberation Day” tariffs announced by the Trump administration back in April.
These 30% tariffs, which target South African exports, are set to begin on August 1 — just one day after the SARB decision.
The uncertainty around their impact is already rippling through markets and raising concerns about trade and investment.
Inflation Is Low, But Risk Remains
While inflation remains under control — well below SARB’s 4.5% target midpoint — South Africa still carries a high risk premium in global markets.
This makes any interest rate move a balancing act. Cut too soon, and the rand could weaken, scaring off investors.
Wait too long, and the struggling local economy might miss out on much-needed support.
If the SARB cuts rates this week, it’ll be the third cut in just eight months.
But if it decides to hold, analysts say the door will remain open for a cut later in the year — possibly in September or November — once global conditions settle down.
Why This Decision Matters for Everyday South Africans
Interest rate changes have a direct impact on everything from home loans to personal debt.
The current repo rate stands at 7.25%, while the prime lending rate is 10.75%. A shift in either direction affects monthly repayments, especially for those with large bonds.
To put it into perspective, here’s what monthly repayments look like right now (assuming a 20-year bond, no deposit, and prime-linked interest):
| Bond Amount | Monthly Repayment |
|---|---|
| R750,000 | R7,614 |
| R1,000,000 | R10,152 |
| R2,000,000 | R20,305 |
| R5,000,000 | R50,761 |
Even a small rate cut can ease monthly pressure — which is why so many homeowners will be watching Thursday’s announcement closely.
The SARB’s Decision-Making Team
The Monetary Policy Committee (MPC) meets every two months, always on a Thursday at 15:00.
The committee is currently made up of six members, with Governor Lesetja Kganyago holding the final say if there’s a tie.
Here’s the 2025 interest rate decision calendar so far:
| Month | Date | Outcome |
|---|---|---|
| January | 30 Jan | 25 bps cut |
| March | 20 Mar | No change |
| May | 29 May | 25 bps cut |
| July | 31 Jul | ? |
| September | 18 Sep | Pending |
| November | 20 Nov | Pending |
What to Watch This Week
All eyes will be on Thursday’s MPC statement and vote details, which will reveal how close the decision was and whether a future cut is likely.
With the Trump tariffs coming into effect the very next day, the timing couldn’t be more delicate.
No matter which way the decision goes, it will say a lot about how the SARB is reading both local and global risks — and how it plans to guide South Africa through an increasingly unpredictable financial landscape.