The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) elected to hike interest rates on Thursday.
SARB’s MPC increased interest rates by 25 basis points.
SARB Governor Lesetja Kganyago confirmed that four of the six-person MPC favoured a 25 basis point hike while two preferred no change.
The repo rate thus rises to 7%, while the prime lending rate increases to 10.5% – placing additional pressure on households already struggling with rising living costs.
The expected move follows a sharp increase in inflation, driven largely by the ongoing conflict in the Middle East and its knock-on effect on global oil prices.
Inflation jumps above target
Headline consumer inflation accelerated to 4% in April, climbing sharply from 3.1% in March and moving further above the Reserve Bank’s preferred 3% target.
Economists say the increase marked the first major inflationary impact stemming from renewed geopolitical instability in the Middle East, particularly around disruptions to global energy supply routes.
The war in the region has triggered higher international oil prices, fuelling concerns about sustained inflation pressure across emerging markets.
Fuel prices hit South Africa
South Africa, which imports most of its fuel, has not escaped the fallout.
Motorists have already felt the effects through steep fuel price increases in recent months, while higher transport costs are expected to filter through to food and consumer prices.
Government introduced temporary fuel levy relief measures to soften the blow, but portions of that support are expected to be phased out, adding to inflation concerns.
What a rate hike would means
A 25 basis point increases translates into higher monthly repayments for consumers with home loans, vehicle finance, credit cards and other forms of debt.
Banks typically pass repo rate increases directly onto customers through higher lending rates.
For consumers already grappling with elevated food prices, expensive fuel and broader economic strain, another interest rate hike could deepen affordability pressures.
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 deciding vote if necessary.
Dates for SARB MPC meeting dates in 2026
| Month | Date | Outcome |
| January | 29 January | No change |
| March | 26 March | No change |
| May | 28 May | 25 bps hike |
| 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, as well as what a 25 basis point hike means:
| Bond | Current | 25 basis point hike | Change |
| R750 000 | R7 362 | R7 488 | R126 |
| R800 000 | R7 853 | R7 987 | R134 |
| R850 000 | R8 344 | R8 486 | R142 |
| R900 000 | R8 835 | R8 985 | R150 |
| R950 000 | R9 326 | R9 485 | R159 |
| R1 000 000 | R9 816 | R9 984 | R168 |
| R1 500 000 | R14 725 | R14 976 | R251 |
| R2 000 000 | R19 633 | R19 968 | R335 |
| R2 500 000 | R24 541 | R24 960 | R419 |
| R3 000 000 | R29 449 | R29 951 | R502 |
| R3 500 000 | R34 358 | R34 943 | R585 |
| R4 000 000 | R39 266 | R39 935 | R669 |
| R4 500 000 | R44 174 | R44 927 | R753 |
| R5 000 000 | R49 082 | R49 919 | R837 |
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