On 31 July 2025, the South African Reserve Bank (SARB) lowered the repo rate by 25 basis points to 7%, which became effective from 01 August 2025, marking its lowest level since November 2022. This reduction effectively brings the prime lending rate down to 10,50%. The repo rate, or repurchase rate, is the interest rate at which commercial banks borrow funds from the SARB, while the prime lending rate is the base rate at which banks lend money to consumers. When the repo rate is cut, banks typically follow by reducing their prime rates, resulting in lower interest rates on home loans, car loans, personal loans, and credit cards, except for those with fixed-rate agreements. This leads to lower monthly repayments for many consumers, increasing their disposable income and encouraging spending, which can stimulate economic activity and support job creation.

Download Mbalo Brief – August 2025