{"id":89966,"date":"2025-09-17T18:06:30","date_gmt":"2025-09-17T18:06:30","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/great-news-for-interest-rates-in-south-africa"},"modified":"2025-09-17T18:12:59","modified_gmt":"2025-09-17T18:12:59","slug":"great-news-for-interest-rates-in-south-africa","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/great-news-for-interest-rates-in-south-africa","title":{"rendered":"Great news for interest rates in South Africa"},"content":{"rendered":"<p><span style=\"color: #ff6600\"><strong>Africa-Press &#8211; South-Africa. <\/strong><\/span>Following a surprise drop in inflation in August, some economists believe South Africa could see two more cuts to interest rates this year\u2014with the first potentially hitting tomorrow.<\/p>\n<p>According to Investec Chief Economist Annabel Bishop, cooler inflation of 3.3% in August\u2014against expectations of a rise to 3.6%\u2014has increased the chances of a 50 basis point cut in 2025.<\/p>\n<p>However, this is unlikely to happen all at once.<\/p>\n<p>Bishop says the bank is now betting on a 25 basis point cut this week with a chance for another 25 basis point cut in November.<\/p>\n<p>\u201cThe SARB is still only likely to deliver a 25bp cut tomorrow, and not a full 50bp move, but the chance will grow for a 25bp cut in November,\u201d she said.<\/p>\n<p>Investec has been particularly bullish about interest rate cuts, having pencilled in a 25 basis point for the Monetary Policy Committee\u2019s (MPC\u2019s) September or final November meeting.<\/p>\n<p>Other forecasters have had more muted expectations, with most anticipating a hold on rates. However, the cooler inflation has also likely caught them by surprise.<\/p>\n<p>Most predictions from banking and finance groups for a hold on interest rates this week were premised on inflation ticking higher, and the Reserve Bank looking for the figure to move towards its new preferred 3% target.<\/p>\n<p>The broader market view is that the SARB won\u2019t cut rates further while it moves to target 3%, with some views on the extreme end forecasing a hold on interest rates until 2027.<\/p>\n<p>According to Nedbank, the Reserve Bank has already given guidance on its 3% targeting, saying it believes it will take time to anchor inflation expectations at this point.<\/p>\n<p>\u201cConsequently, there will be an adjustment period. During this transition, (the SARB) will approach spells of rising inflation like they have always done,\u201d the group said.<\/p>\n<p>\u201cThey will consider the sources of upward pressure and the risks of persistence. If they are reasonably<\/p>\n<p>confident that the pressures are isolated and temporary, they will look through the upturn without adjusting monetary policy.\u201d<\/p>\n<p>Conversely, if the central bank sees evidence of secondary effects or persistence, it will adjust interest rates accordingly.<\/p>\n<p><b>3% target is the key<\/b><\/p>\n<p>Investec Chief Economist, Annabel Bishop<\/p>\n<p>Nedbank said that, at this stage, the drivers of inflation appear relatively isolated and temporary in nature, and \u201cwe do not expect meaningful or sustained secondary price effects\u201d.<\/p>\n<p>Thus, the group said that an upswing in inflation would likely be met with a hold on interest rates as the Reserve Bank \u201clooks through\u201d rising prices.<\/p>\n<p>However, it added that if inflation cools and the rand strengthens more than anticipated, \u201cthe upward pressure on inflation could fall away relatively quickly and open the door to further easing\u201d.<\/p>\n<p>Following the lower inflation data, Nedbank said that the MPC move on Thursday will be a close call.<\/p>\n<p>The group still believes that inflation will increase in the near term, but it will remain relatively muted, averaging around 3.3% in 2025.<\/p>\n<p>Thereafter, it is expected to rise to an average of 4.3% in 2026, before gradually moderating towards 3% during 2027, the bank said.<\/p>\n<p>The key factor here is that, even though inflation was cooler than expected, it is still above the 3% target.<\/p>\n<p>However, other market factors, like the stronger rand and the US Fed moving towards a potentially rapid cutting cycle to stave off economic decline, support a cut.<\/p>\n<p>\u201cGiven the mild inflation outlook, tomorrow\u2019s MPC decision will be a close call,\u201d Nedbank said.<\/p>\n<p>\u201cWith inflation rising from the SARB\u2019s preferred 3% anchor, our base view is that the MPC will leave interest rates unchanged,\u201d it said.<\/p>\n<p>\u201cHowever, the rand\u2019s recent rally and the likely further easing in US monetary policy have improved the odds of another rate cut.\u201d<\/p>\n<p><strong>For More News And Analysis About <span style=\"color: #ff6600\">South-Africa<\/span> Follow <span style=\"color: #ff6600\">Africa-Press<\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Africa-Press &#8211; South-Africa. Following a surprise drop in inflation in August, some economists believe South Africa could see two more cuts to interest rates this year\u2014with the first potentially hitting tomorrow. According to Investec Chief Economist Annabel Bishop, cooler inflation of 3.3% in August\u2014against expectations of a rise to 3.6%\u2014has increased the chances of a [&hellip;]<\/p>\n","protected":false},"author":84,"featured_media":89965,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[275],"class_list":["post-89966","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-south-africa-2"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.1 (Yoast SEO v27.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Great news for interest rates in South Africa - South Africa<\/title>\n<meta name=\"description\" content=\"Following a surprise drop in inflation in August, some economists believe South Africa could see two more cuts to intere ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/great-news-for-interest-rates-in-south-africa\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Great news for interest rates in South Africa\" \/>\n<meta property=\"og:description\" content=\"Following a surprise drop in inflation in August, some economists believe South Africa could see two more cuts to intere ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/great-news-for-interest-rates-in-south-africa\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2025-09-17T18:06:30+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-09-17T18:12:59+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2025\/09\/sm_1758120148.471996.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"675\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/great-news-for-interest-rates-in-south-africa#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/great-news-for-interest-rates-in-south-africa\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Great news for interest rates in South Africa\",\"datePublished\":\"2025-09-17T18:06:30+00:00\",\"dateModified\":\"2025-09-17T18:12:59+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/great-news-for-interest-rates-in-south-africa\"},\"wordCount\":629,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/great-news-for-interest-rates-in-south-africa#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2025\/09\/sm_1758120148.471996.jpg\",\"keywords\":[\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/great-news-for-interest-rates-in-south-africa#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/great-news-for-interest-rates-in-south-africa\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/great-news-for-interest-rates-in-south-africa\",\"name\":\"Great news for interest rates in South Africa - 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