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Consumers hand over 100 Rand notes for food and other purchases.
The Head of Macroeconomic Research at Standard Bank, Elna Moolman, says the impact of the interest rate cut, which was widely expected by markets will only be felt next year.
Her comments follow the Reserve Bank’s 25 basis points interest rate cut announcement, which takes the prime lending rate to 10.25%.
Reserve Bank Governor Lesetja Kganyago has announced that the repo rate will be cut by 25 basis points – meaning that the prime lending rate will decline to 10.25%. Kganyago made the announcement in Pretoria after the three-day meeting of the Monetary Policy Committee on… pic.twitter.com/xGBB3S3IIz
— SABC News (@SABCNews) November 20, 2025
Dr Moolman says while the rate cut is expected to bring some relief to indebted consumers, the total impact on the economy tends to peak in 10 to 12 months.
“Our models show that the maximum impact on consumer spending of the interest rate cuts in this cycle will be next year, this will then counteract the reduced tailwind from low inflation. Consumer spending will likely be boosted by a wealth effect from stock market gains. There will likely be further interest rate relief next year but it cannot be taken for granted that this will be at consecutive meetings. The Reserve Bank will probably want to cut rates gradually to assess how the inflation forecast and inflation expectations unfold,” says Dr Moolman.
MPC Repo Rate
