SARB MPC cuts repo rate by 25 basis points to 6.75%

The South African Reserve Bank (SARB)’s monetary policy committee (MPC) has cut the repo rate by 25 basis points, in line with some market expectations.

The MPC met this week to deliberate on policy rates, marking the final meeting for the year.

Reserve Bank Governor Lesetja Kganyago said the decision by the six-member committee was unanimous.

"Against this backdrop, the MPC decided to reduce the policy rate by 25 basis points, to 6.75%, with effect from 20 November. Members agreed there was scope now to make the policy stance less restrictive, in the context of an improved inflation outlook."

Inflation inched up to 3.6% for October in the latest Stats SA reading on Wednesday.

While this is higher than the 3% average for the first half of the year, Kganyago said the pressure from non-core items was likely to be temporary, with inflation heading lower again from the beginning of next year.

"Because of these downside surprises, together with a stronger rand, and a lower oil price assumption, we have small downward revisions to our inflation outlook, for both 2025 and 2026. We remain on track to deliver 3% inflation over the medium-term."