Repo rate South Africa: SARB weighs 7.25% hold or hike on 19 November

The South African Reserve Bank announces its last repo rate decision of 2026 on Thursday, 19 November, and economists are split between a hold at 7.25% and a 25-basis-point hike to 7.50%. October inflation, due a day earlier on Wednesday 18 November, is likely to tip the balance.

The repo rate has been 7.25% since the Monetary Policy Committee raised it by 25 basis points on 23 September, which took the prime lending rate to 10.75%. That decision was unanimous, and the Bank pointed to persistent price pressure from the war in Iran and the need to keep inflation expectations anchored.

Will the SARB raise the repo rate on Thursday?

It is a genuinely open call. Nedbank expects another hike. “Consequently, we expect the Monetary Policy Committee to raise interest rates by 25 basis points at its November meeting,” its economists said, as reported by BusinessTech. Nedbank also warned that inflation is likely to stay above the 3% target for an extended period.

Old Mutual Wealth and Investec lean the other way. Izak Odendaal of Old Mutual Wealth expects inflation to stay between 4.5% and 5% for a few months and then fall quickly once high fuel prices drop out of the base by April 2027. “This means further rate increases are probably unnecessary and unlikely,” he said. Investec’s Annabel Bishop said market signals point away from a hike.

The Reserve Bank’s own September Quarterly Projection Model shows the policy rate broadly stable for the rest of 2026, with cuts later as inflation returns to 3%. The Bank also ran scenarios with one or two more increases, and it stresses that it decides meeting by meeting rather than following the model mechanically.

What will October inflation show?

Headline CPI rose to 4.5% in September from 4.4% in August, softer than the 4.7% to 5.0% the market had expected. Stats SA releases the October figure on Wednesday 18 November. Trading Economics forecasts 4.7%, and Nedbank now expects inflation to peak at 5.7% in October, down from an earlier forecast of 6.4% in November.

The reason for that downgrade is fuel. Treasury announced R10 billion of temporary relief, cutting the fuel levy by R3 a litre on diesel and R1.50 on petrol from 4 November to 1 December, and by smaller amounts until 5 January 2027. That helps November and December inflation, but it does not change October’s print, which is why Wednesday’s number matters so much.

A reading at or below forecast would strengthen the case for a hold. A big upside surprise would make Nedbank’s hike call look more likely.

What does a hold or a hike mean for home loans?

A hike to 7.50% would lift prime to 11.00%. On a R1 million home loan over 20 years, our calculation puts the monthly repayment at about R10,152 at today’s 10.75% prime and about R10,322 at 11.00%, roughly R170 more a month. Rates on vehicle finance, overdrafts and credit cards linked to prime would also rise by 0.25 percentage points.

A hold keeps repayments where they are, and if Odendaal’s view proves right, the next move after the fuel shock fades could eventually be lower. He sees the policy rate settling around 5.5% to 6% once inflation is back at 3%.

How could the decision move the rand and bonds?

The rand goes into the week on the back foot. USD/ZAR closed Friday near R16.92 per dollar, near its weakest since early April, as hot US inflation data strengthened the dollar. We covered that move in our USD/ZAR rand report.

Interest rate gaps are central here. The Fed is widely expected to hike on 9 December, and Bishop has warned that a narrowing gap between South African and US rates puts pressure on the rand. A SARB hike would widen that gap again and could give the currency some support. A hold could leave the rand more exposed to dollar strength in the short term, though lower inflation over time is a positive for local assets.

Bond yields have already moved up. The benchmark 2035 government bond yield rose to 8.56% in early trade on Friday, according to Reuters. A hawkish surprise could push short-dated yields higher, while a hold paired with a clear message that inflation is under control would likely help longer-dated bonds.

What should traders watch on Wednesday and Thursday?

• Wednesday 18 November: October CPI against the 4.7% forecast, plus core inflation, which strips out fuel and food.
• Thursday 19 November: the vote split. A divided committee would signal how close the Bank is to its next move.
• The statement: any change to the Bank’s inflation forecast, and whether it repeats that it will look through first-round fuel effects.
• The dollar: US data and Fed comments, which have driven most of the rand’s recent swings.

Rate decisions can move USD/ZAR by many pips within minutes. If you want to understand how those moves are measured, read our guide to pips and lot sizes in forex. For more local coverage, see our South Africa news.

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This article is for education and information only and is not financial advice. Figures are as reported by the sources linked above.