The South African Reserve Bank (SARB) will announce its decision on the repo rate this Thursday, July 31, 2025. Many South Africans want to know if the bank will cut the rate. The repo rate affects the cost of borrowing for people and businesses. But will the SARB lower it or keep it steady? Experts have different opinions.

    ALSO READ: SARB Expected to Cut Interest Rates Again This Year, But Economists Disagree on Timing

    What Is the Repo Rate, and Why Does It Matter?

    The repo rate is the interest rate the SARB charges commercial banks when they borrow money. This rate influences how much banks charge customers for loans and mortgages. When the repo rate goes down, borrowing becomes cheaper. This usually encourages people to spend more and businesses to invest. If the repo rate goes up, borrowing costs rise, which helps slow down inflation.

    The SARB uses the repo rate to keep inflation between 3% and 6%. Any change in the rate affects many parts of the economy, so people pay close attention to these decisions.

    What’s Happening in South Africa’s Economy?

    In June 2025, inflation rose slightly to 3.0% from 2.8% in May. This is still within the SARB’s target range, suggesting inflation is under control. Fuel prices have dropped recently, which helps keep inflation low.

    The South African rand has stayed fairly stable. It traded at about R17.97 to the US dollar, even with global uncertainties. This stability might make the SARB comfortable with cutting the repo rate.

    On the other hand, the US plans to introduce a 30% tariff on some South African exports starting August 1. This could hurt South Africa’s economy and make the SARB cautious about lowering rates too soon.

    What Do Experts Think?

    Some economists expect the SARB to cut the repo rate by 0.25% (25 basis points), lowering it from 7.25% to 7.00%. Lisette IJssel de Schepper, chief economist at the Bureau for Economic Research, believes the SARB may also adjust its inflation target in the near future, signalling a softer monetary policy.

    Other experts urge caution. They think global risks and the new US tariffs mean the SARB should hold the rate steady. The bank has been careful in previous meetings, waiting for clearer signs before changing the rate.

    How Would a Repo Rate Cut Affect You?

    If the SARB cuts the repo rate, borrowing will become cheaper. This means lower monthly repayments on home loans and other credit. It could ease financial pressure for many families.

    Cheaper loans might also encourage businesses to invest more, helping the economy grow.

    But there are risks. A rate cut could weaken the rand, making imports more expensive. However, since the rand is stable now, the market might already expect the cut.

    READ MORE: Economists Predict Repo Rate Cut in September as Inflation Remains Low at 3%

    What’s Next?

    The SARB’s decision on Thursday will show how it views inflation, economic growth, and risks like the US tariffs. Consumers and investors will watch closely.

    Whether the repo rate is cut or not, understanding its impact on your finances is important. Keep an eye on inflation trends, the rand’s strength, and borrowing costs.

    The repo rate remains a vital tool in South Africa’s economy. This Thursday’s decision will balance controlling inflation and supporting growth. Stay tuned to trusted news sources for the latest updates.

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