Reserve Bank Holds Interest Rates Steady at 6.75%

The South African Reserve Bank’s Monetary Policy Committee (MPC) has decided to keep the repo rate unchanged at 6.75%, meaning the prime lending rate remains at 10.25%.

The decision was taken during this week’s MPC meeting, where four members voted to hold the rate steady, while two supported a 25-basis-point cut. The outcome comes after annual headline consumer inflation edged slightly higher to 3.6% in December.

Reserve Bank Governor Lesetja Kganyago described 2025 as a “watershed year” for South Africa’s economy, despite ongoing global uncertainty.

“Despite a volatile global backdrop, there was significant progress on domestic reforms, including a new inflation target,” Kganyago said. “These efforts have been rewarded with lower borrowing costs, a rapid decline in inflation expectations, and steadier growth.”

For households and businesses carrying debt, the decision brings some relief, as monthly loan repayments will not increase. However, some economists believe there was room for a small interest rate cut to further support economic growth.

Kganyago said the MPC remains focused on stabilising inflation at 3% over the next few years. He cautioned that in a less favourable scenario, inflation could peak at around 4%, with a slower return to the target.

“In such a case, interest rates would remain largely unchanged in the near term, with the move towards a neutral level delayed by about a year,” he said.

For local communities, the steady interest rate offers short-term certainty, while the broader focus remains on controlling inflation and supporting sustainable economic growth.