South Africa’s September inflation figures have dampened hopes for an interest rate cut in November, with data confirming a modest but notable uptick in price pressures.
According to Stats SA, the headline consumer inflation rate came in at 3.4% year-on-year, narrowly missing bullish expectations of 3.3%, though still below market consensus of 3.5%.
While the figure remains within the South African Reserve Bank’s (SARB) target band, it marks a reversal from the surprise drop recorded in August – a signal that inflationary pressure may be building again.
Inflation trending higher
Economists said the data cements expectations that inflation will trend higher over the coming months, moving further from the SARB’s preferred target of 3%.
“The final meeting of South Africa’s Monetary Policy Committee is happening on 20 November, and that isn’t far off,” says Terence Hove, Senior Financial Markets Strategist at Exness.
“So mark your calendars, because that’s where we will truly see if the MPC will go ahead with a rate cut.
“At the moment, forward rate agreements, a bellwether of borrowing costs, are pricing in a rate cut at a 60% chance.
“That might be too close for some more conservative investors, who may always choose to diversify or hedge instead.
“Each investor has their own risk appetite, and it’s always a good idea to follow that,” Hove added.
‘Deadly serious’
Reserve Bank Governor Lesetja Kganyago reiterated this week that the central bank is “deadly serious” about achieving that goal, saying monetary policy will continue to align with the inflation target.
While the 3% target is not yet formalised, markets anticipate the National Treasury may officially confirm it during the upcoming Medium-Term Budget Policy Statement (MTBPS).
The latest data has led analysts to question whether the Monetary Policy Committee (MPC) will proceed with a rate cut at its final meeting of the year on Thursday, 20 November.
Over the past year, the Reserve Bank has already cut rates by 125 basis points, though its last meeting saw no change – an indication perhaps of internal caution.
With the final MPC meeting of 2025 just weeks away, economists say the decision will likely come down to a coin flip between cautious optimism and inflationary vigilance.
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 in 2025 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.
The repo rate is currently at 7% while the prime lending rate is 10.5%.
| Month | Date | Outcome |
| January | 30 January | 25 basis point cut |
| March | 20 March | No change |
| May | 29 May | 25 basis point cut |
| July | 31 July | 25 basis point cut |
| September | 18 September | No change |
| November | 20 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 | Current |
| R750 000 | R7 488 |
| R800 000 | R7 987 |
| R850 000 | R8 486 |
| R900 000 | R8 985 |
| R950 000 | R9 485 |
| R1 000 000 | R9 984 |
| R1 500 000 | R14 976 |
| R2 000 000 | R19 968 |
| R2 500 000 | R24 960 |
| R3 000 000 | R29 951 |
| R3 500 000 | R34 943 |
| R4 000 000 | R39 935 |
| R4 500 000 | R44 927 |
| R5 000 000 | R49 919 |
