Monthly Rates Dashboard – Aug 2025

The SARB’s decision to cut the repo rate by 25bps to 7.0% at its July MPC meeting met market expectations, with a unanimous vote reflecting a shift from the previous meeting’s split. However, the most significant development was the SARB’s pivot towards anchoring inflation at 3%, the lower bound of its current target range.

While not an official change, this paves the way for a formal adoption of a 3% inflation target in the months ahead, aligning with global trends. This shift strengthens the SARB’s commitment to price stability but may temper the case for immediate further rate cuts until inflation expectations realign with this new anchor.

ETM’s view is that the SARB will likely pause rate cuts until January 2026, adopting a cautious approach to assess the impact of evolving price pressures. These pressures stem from external risks, notably higher US tariffs on South African exports, which have already prompted downward revisions to GDP. Additionally, the SARB will evaluate the effects of its past rate reductions on domestic inflation dynamics.

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