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# South African Reserve Bank cuts repo rate by 25 basis points to 7.00%
- URL: https://www.theglobalbanker.com/south-african-reserve-bank-cuts-repo-rate-by-25-basis-points-to-7-00/
- Published: 2025-07-31T15:00:00.000Z
- Updated: 2026-10-27T08:55:30.000Z
- Description: The SARB's Monetary Policy Committee unanimously lowered the repo rate to 7.00% on 31 July 2025 and said it would now aim for inflation of 3%, the bottom of its 3–6% target range.
- Author: TGB Editorial Team
- Tags: Central Banks, Africa, #archive

The South African Reserve Bank's Monetary Policy Committee (MPC) cut the repo rate by 25 basis points to 7.00% on 31 July 2025\. The decision was unanimous and the new rate took effect on 1 August, with commercial banks' prime lending rate falling to 10.50%.

The reduction, from the previous level of 7.25%, took the repo rate to its lowest level since January 2023 and lowered borrowing costs for households and businesses with loans linked to the prime rate.

#### A LOWER INFLATION OBJECTIVE

Alongside the rate decision, the MPC said it would now prefer inflation to settle at 3%, the bottom of South Africa's 3–6% inflation target range, and that it would use forecasts anchored on 3% at its future meetings. Governor Lesetja Kganyago said the formal target range itself remained unchanged.

Kganyago said the prospect of a lower inflation target had already bolstered the rand and lowered long-term borrowing costs, and that the bank had an opportunity to lock in low inflation and clear the way for sustainably lower interest rates. 

Headline consumer price inflation stood at 3.0% in June 2025, while core inflation was 2.9%. The Reserve Bank forecast headline inflation averaging 3.3% in 2025.

#### GROWTH FORECAST LOWERED

The economy grew by 0.1% in the first quarter of 2025\. The Reserve Bank lowered its growth forecast for 2025, citing downward revisions to GDP data and the expected impact of US tariffs, which could reach 30% on some South African exports.