July 31 2025 16:45
SOUTH AFRICA
The South African Reserve Bank (SARB)’s Monetary Policy Committee (MPC) cut rates in the country by 25 basis points. This brought the repo rate down to 7.00% and the prime lending rate to 10.50%.
The decision was in line with most published expectations. Given the imminent application of a 30% tariff on exports to the US from August 1 which probably prompted the cut.
Bank governor Lesetja Kanyago said global economic conditions were uncertain and conditions in SA were weak. Inflation has remained low but expectations have moderated with the expectation that headline inflation will rise over the rest of 2025, averaging 3.3% for the year. Kanyago said the MPC considered a new inflation scenario with a 3% target in its modelling. Th existing 3% to 6% target was too high and too side and needed to be reformed he said.
Yael Geffen, CEO of Lew Geffen Sotheby’s International Realty, welcomed the MPC’s decision to cut the repo rate by 25 basis points as households face one of the toughest economic periods in living memory.
“It’s certainly great that the financial pressure on households will ease slightly in the short term. On a R2 million bond, monthly repayments will go down by just below R340 a month, but we’re on the precipice of an economic disaster and while this rate cut will help for now, it might come back to bite us in the long-term,” she said.
“The US Federal Reserve chose not to cut rates this week when America’s economy ramped up to 3% growth in the second quarter, while we’re easing back when ours is circling the drain,” she said.
“We have record unemployment, basic household costs such as electricity have risen by several hundred percent in recent years and on average households are spending an alarming two thirds of their income servicing debt,” she said.
This decrease sees the prime lending rate drop to its lowest point since 2022.
alistair@propertyflash.co.za
