Reserve Bank announces interest rate cut for South Africa

The Reserve Bank’s Monetary Policy Committee (MPC) has voted to cut South Africa’s interest rates by 25 basis points.

This marks the sixth cut in the current cycle, and brings the repo rate down to 6.75% and the prime lending rate to 10.25%.

In announcing this cut on Thursday, 20 November, Reserve Bank Governor Lesetja Kganyago said the decision was unanimous, with all MPC members voting in favour of a cut.

“Members agreed there was scope now to make the policy stance less restrictive, in the context of an improved inflation outlook,” he said.

The MPC’s decision comes after Stats SA released South Africa’s latest inflation data on Wednesday, 19 October, which showed that CPI inflation inched higher to reach 3.6% in October. 

This decision also follows Finance Minister Enoch Godongwana’s announcement in the Medium-Term Budget Policy Statement that South Africa’s inflation target would be lowered to 3%.

Now, the Reserve Bank aims to keep inflation at 3%, with a one percentage point tolerance band, making the implicit target 2% to 4%.

The decision to cut South Africa’s interest rates comes after the MPC voted to keep rates unchanged at its last meeting in September, which followed another 25 basis point cut in July.

Since September 2024, when the current cutting cycle began, the MPC has implemented 150 basis points worth of cuts.

In the hiking cycle that preceded these cuts, the MPC raised rates by 475 basis points, which brought interest rates to 15-year highs.

The MPC’s decision on Thursday to cut rates was largely expected, with around 70% of economists foreseeing a 25-basis-point reduction.

This expectation was fueled by Godongwana’s official announcement of the inflation target change, as this provided more certainty and congruence between the Reserve Bank and the National Treasury.

In addition, while the target has been lowered to 3%, the one percentage point tolerance band means October’s inflation print of 3.6% remains within the accepted range.

South Africa’s CPI inflation has averaged 3.13% in 2025 to date, with October’s print being the highest this year so far.

Kganyago said the MPC assesses the risks to South Africa’s inflation outlook as balanced.

The Reserve Bank’s Quarterly Projection Model continues to forecast gradual rate cuts as inflation subsides.

“As before, this rate path remains a broad policy guide. Our decisions will continue to be taken on a meeting-by-meeting basis, with careful attention to the outlook, data outcomes, and the balance of risks to the forecast,” he said.

The graph below shows the trends in South Africa’s inflation and interest rates from May 2021 to November 2025.