Reserve Bank MPC likely to cut repo rate: Economist

Reserve Bank Governor Lesetja Kganyago speaks during the SA Reserve Bank Financial Stability Forum on 20 June 2025.

Independent Economist Elize Kruger says she expects the Reserve Bank’s Monetary Policy Committee to cut interest rates by 25 basis points when it announces its rate decision this afternoon at 15:00 in Pretoria.

Kruger says subdued consumer price inflation, muted economic growth, and real rates remaining restrictive may leave the door open for additional monetary support.

The MPC cut rates by 25-basis points at the last meeting which took the repo rate to 7.25% and the prime lending rate to 10.75%.

The bank also expressed that it was considering a scenario with a lower inflation target range for South Africa.

“Inflation data for the month of June suggests that inflation remains well under control in South Africa. Headline inflation came in at 3% up from 2.8% in May -it’s still at the bottom of the Reserve Bank’s 3% to 6% target band. From that view, I’m still positive that the Reserve bank can still cut interest rates by 25 basis points at the end of July as inflation remains well under control and the economy remains quite weak and the combination opens a window for a further cut in interest rates.”