South Africa is expected to experience further interest rate relief in 2026 as inflation continues to ease and economic growth remains subdued, strengthening the case for a gradual reduction in borrowing costs.
The South African Reserve Bank (SARB) ended 2025 with the repo rate at 6.75%, following the start of an easing cycle after a prolonged period of tight monetary policy.
The shift reflected improved inflation dynamics and growing confidence that price pressures are moving closer to the central bank’s preferred target.’
‘Now is the time to go shopping’
“Lower repo (repurchase) rates signal consumers that ‘Now is the time to go shopping,’ as typically everything from personal loans to mortgages and consumer goods becomes more affordable,” says Terence Hove, Senior Financial Markets Strategist at Exness.
“There’s a caveat, though. Although the spending power rises, the rand weakens, leaving savers with significantly less yield than expected.
“Additionally, global inflationary pressures and the geoeconomic context remain the main drivers of the SARB’s stance going forward,” Hove added.
Inflation Trend Supports Easing
Inflation has remained relatively contained, supported by lower fuel prices, improved supply conditions, and subdued consumer demand.
These factors have reduced pressure on the central bank to maintain restrictive interest rates, opening the door for further adjustments in 2026.
Economists broadly expect inflation to stay within a manageable range throughout the year, giving policymakers room to prioritise economic support while remaining vigilant against renewed price shocks.
Measured Approach Expected
While additional rate cuts are anticipated, the SARB is likely to proceed cautiously.
Any easing is expected to be gradual, with decisions taken on a meeting-by-meeting basis in response to inflation data, currency movements, and global financial conditions.
Market expectations point to one or two small cuts over the course of 2026, potentially lowering the repo rate closer to 6%-6.5% by year-end – if current trends persist.
Risks Remain
Despite the positive outlook, risks remain.
A weaker rand, rising food or electricity costs, or renewed global inflation could limit the scope for further cuts.
International monetary policy developments, particularly in major economies, will also influence domestic rate decisions.
The central bank has repeatedly emphasised its commitment to protecting price stability, even as it balances the need to support growth.
Impact on Consumers and Businesses
Lower interest rates would offer relief to households with variable-rate debt, particularly home loans, and could encourage greater consumer spending.
For businesses, reduced borrowing costs may support investment and expansion, although structural economic challenges continue to weigh on confidence.
What happened in 2025?
While the cost of living in South Africa continues to seemingly go up – and up – on a daily basis, interest rates did decrease over the course of 2025.
The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) met six times in 2025 and at four of those meetings the six members elected to cut interest rates by 25 basis points.
At the other two meetings, the rates were kept on hold.
That equated to a full percentage drop from 1 January 2025 when the prime lending rate stood at 11.25% compared to it’s current 10.25%, while the repo rate dropped from 7.75% to 6.75% over the last 12 months.
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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 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.
Dates for SARB MPC meetings in 2026
| Month | Date | Outcome |
| January | 29 January | TBA |
| March | 26 March | TBA |
| May | 28 May | TBA |
| July | 23 July | TBA |
| September | 23 September | TBA |
| November | 19 November | TBA |
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.
| Bond | 31 December |
| R750 000 | R7 362 |
| R800 000 | R7 853 |
| R850 000 | R8 344 |
| R900 000 | R8 835 |
| R950 000 | R9 326 |
| R1 000 000 | R9 816 |
| R1 500 000 | R14 725 |
| R2 000 000 | R19 633 |
| R2 500 000 | R24 541 |
| R3 000 000 | R29 449 |
| R3 500 000 | R34 358 |
| R4 000 000 | R39 266 |
| R4 500 000 | R44 174 |
| R5 000 000 | R49 082 |
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