MPC expected to keep interest rates unchanged: Roodt

[FILE IMAGE]: Reserve Bank Governor Lesetja Kganyago announces a decision by the Monetary Policy Committee (MPC) on interest rates in Pretoria on July 31, 2025.

Chief Economist at Efficient Group, Dawie Roodt, expects the Reserve Bank’s Monetary Policy Committee (MPC) to keep interest rates unchanged when it announces its decision on Thursday afternoon.

Despite reduced inflation expectations, the bank is expected to hold its rate-cutting cycle this time around, with a final cut only expected at its last meeting in November.

In July, the MPC decided to cut rates by 25 basis points, taking the repo rate to 7% and the prime lending rate to 10.5%.

Thursday’s interest rate decision also follows Statistics South Africa’s (Stats SA) latest data, which shows that inflation eased from 3.5% in July to 3.3% in August 2025.

Roodt says, “Everything points to a further reduction in interest rates, however, probably not yet. The Reserve Bank does have room to cut rates a little bit further, but we also know that Lesetja Kganyago is quite a hawk and he wants to manage inflation expectations down to 3%. So I don’t believe there is room for a rate cut, but knowing the Governor of the Reserve Bank, he will wait another two months before touching rates again.”