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Reserve bank Governor Lesetja Kganyago speaks during the Monetary Policy Committee’s announcement to cut the policy rate by 25 basis points on 30 May 2025.
Reserve Bank Governor Lesetja Kanyago says a lower inflation target will offer relief to indebted consumers by lowering their repayments on loans, while also supporting economic growth and job creation.
Kganyago says a lower inflation target will bring about structurally lower interest rates and keep them fixed at a low level.
Yesterday, the Monetary Policy Committee announced a cut in the interest rate by 25 basis points, and as a result, the repo rate has been decreased to 7.25%. The prime lending rate is now 10.75%.
The governor emphasised that while work to introduce a low inflation target remains underway, the Reserve Bank will make its recommendation to the Finance Minister once it has decided on an appropriate target rate.
“And what the scenario shows is that you actually end up with higher growth over the forecast horizon, and higher growth will benefit the entire economy, but a growth economy should also be an economy that creates jobs, which means that we would be making progress in dealing with the job creation challenge. That scenario says that we will have lower interest rates, which means that borrowers will benefit.”
SARB cuts interest rates by 25 basis points to 7.25%:
