SA ECONOMY SHOWS RESILIENCE: INTEREST RATES CUT TO 6.75%

SA Reserve Bank Governor Lesetja Kganyago, Managing Director of IMF news Kristalina Georgieva and Fianance Minister Enoch Godongwana.

By Mpho Dube, Editor-in-Chief, The Azanian

In a unanimous decision, the South African Reserve Bank's (SARB) Monetary Policy Committee has cut the country's interest rates by 25 basis points, taking the repo rate to 6.75% and the prime lending rate to 10.25%. This move is expected to provide relief to borrowers and stimulate economic growth.

SARB Governor Lesetja Kganyago attributed the decision to improved inflation outlook, a stronger rand, and lower oil prices. "We continue to see this pressure as temporary, with inflation heading lower again from the beginning of next year," he said.

The inflation rate for October was recorded at 3.6%, higher than September's 3.4% but lower than market expectations of 3.7%. The SARB remains committed to delivering 3% inflation over the medium term.

The rate cut is seen as a positive step towards boosting economic growth, with analysts expecting further cuts in the future. The MPC will meet again in January 2026 to review the country's economic situation.

This development comes as South Africa's economy shows signs of resilience, with the country recently exiting the Financial Action Task Force's grey list and receiving a credit rating upgrade from S&P Global.