Interest rates | Bold prediction for South Africa in 2026

South Africa is expected to experience further interest rate relief in 2026 as inflation continues to ease and economic growth remains subdued, strengthening the case for a gradual reduction in borrowing costs.

The South African Reserve Bank (SARB) ended 2025 with the repo rate at 6.75%, following the start of an easing cycle after a prolonged period of tight monetary policy.

The shift reflected improved inflation dynamics and growing confidence that price pressures are moving closer to the central bank’s preferred target.’

“Lower repo (repurchase) rates signal consumers that ‘Now is the time to go shopping,’ as typically everything from personal loans to mortgages and consumer goods becomes more affordable,” says Terence Hove, Senior Financial Markets Strategist at Exness.

“There’s a caveat, though. Although the spending power rises, the rand weakens, leaving savers with significantly less yield than expected.

“Additionally, global inflationary pressures and the geoeconomic context remain the main drivers of the SARB’s stance going forward,” Hove added.

Inflation Trend Supports Easing

Inflation has remained relatively contained, supported by lower fuel prices, improved supply conditions, and subdued consumer demand.

These factors have reduced pressure on the central bank to maintain restrictive interest rates, opening the door for further adjustments in 2026.

Economists broadly expect inflation to stay within a manageable range throughout the year, giving policymakers room to prioritise economic support while remaining vigilant against renewed price shocks.

Measured Approach Expected

While additional rate cuts are anticipated, the SARB is likely to proceed cautiously.

Any easing is expected to be gradual, with decisions taken on a meeting-by-meeting basis in response to inflation data, currency movements, and global financial conditions.

Market expectations point to one or two small cuts over the course of 2026, potentially lowering the repo rate closer to 6%-6.5% by year-end – if current trends persist.

Risks Remain

Despite the positive outlook, risks remain.

A weaker rand, rising food or electricity costs, or renewed global inflation could limit the scope for further cuts.

International monetary policy developments, particularly in major economies, will also influence domestic rate decisions.

The central bank has repeatedly emphasised its commitment to protecting price stability, even as it balances the need to support growth.

Impact on Consumers and Businesses

Lower interest rates would offer relief to households with variable-rate debt, particularly home loans, and could encourage greater consumer spending.

For businesses, reduced borrowing costs may support investment and expansion, although structural economic challenges continue to weigh on confidence.

What happened in 2025?

While the cost of living in South Africa continues to seemingly go up – and up – on a daily basis, interest rates did decrease over the course of 2025.

The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) met six times in 2025 and at four of those meetings the six members elected to cut interest rates by 25 basis points.

At the other two meetings, the rates were kept on hold.

That equated to a full percentage drop from 1 January 2025 when the prime lending rate stood at 11.25% compared to it’s current 10.25%, while the repo rate dropped from 7.75% to 6.75% over the last 12 months.

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Who are the SARB’s MPC?

The South African Reserve Bank’s monetary policy committee meets every second month to announce changes – if any – to the country’s repo and prime lending rates.

The meetings are scheduled to take place in January, March, May, July, September and November – and always on a Thursday at 15:00.

Currently, the committee comprises of six people, with Lesetja Kganyago holding the position of governor of the SARB – and the deciding vote if necessary.

Dates for SARB MPC meetings in 2026

Month	Date	Outcome
January	29 January	TBA
March	26 March	TBA
May	28 May	TBA
July	23 July	TBA
September	23 September	TBA
November	19 November	TBA

Monthly bond repayment table

The table below shows the current monthly bond repayments on various bond values over a 20-year period assuming no deposit and repayments at prime.

Bond	31 December
R750 000	R7 362
R800 000	R7 853
R850 000	R8 344
R900 000	R8 835
R950 000	R9 326
R1 000 000	R9 816
R1 500 000	R14 725
R2 000 000	R19 633
R2 500 000	R24 541
R3 000 000	R29 449
R3 500 000	R34 358
R4 000 000	R39 266
R4 500 000	R44 174
R5 000 000	R49 082

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