Will the SARB cut interest rates? Experts weigh in on the 25 basis point prediction
Image: File / Oupa Mokoena/Indpendent Newspapers
Debt experts and economists believe that an interest rate cut of 25 basis points is likely when the Monetary Policy Committee (MPC) meets on Thursday.
This follows Statistics South Africa announcement last week that CPI inflation edged up slightly from 2.7 % in March 2.7% to 2.8% in April
Reza Ismail, the head of bonds at Prescient Investment Management, said that he believes there will be an interest rate cut on Thursday. 'The observed 3-month Johannesburg Interbank Average Rate (JIBAR) of 7.45% and the 1x4 FRA (Forward Rate Agreement) at 7.26% suggest that markets are currently pricing in a modest easing bias. This reflects a forward rate expectation approximately 20 basis points below the current 3-month interbank rate, implying a probability-weighted scenario of a 25 basis point repo rate cut at the May 29th MPC meeting."
Ismail added that the term structure of FRA rates from 1x4 to 21x24 remains anchored within the 7% range, indicating expectations of modest further easing over the medium term, but not a sustained or aggressive cutting cycle.
'This market pricing is consistent with the SARB's March 2025 communication, which assessed the real repo rate at around 3.5%, proximate to the Bank's estimated neutral rate of 3.0%, and stated that policy was now 'near neutra'. The Quarterly Projection Model (QPM) path continues to imply a gradual and conditional easing trajectory - contingent on inflation remaining anchored near the midpoint and downside risks to growth not materialising in a disorderly fashion.'
Casey Sprake, an economist at Anchor Capital, said South Africa's headline consumer inflation edged slightly higher in April, rising to 2.8% year-on-year from 2.7% in March. The latest inflation data strengthens the case for monetary easing.
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Advertisement
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Next
Stay
Close ✕
'With core inflation easing, wage growth muted, and consumer demand soft, real interest rates remain in restrictive territory. This means that current monetary policy is still exerting a significant dampening effect on the economy. As such, we expect the South African Reserve Bank (SARB) to cut the repo rate by 25 basis points at its upcoming Monetary Policy Committee (MPC) meeting on 29 May. The likelihood of a third rate cut later in 2025 remains evenly balanced at this stage,' Sprake said,
Benay Sager, the executive head of DebtBusters, said believes all the indicators are aligned in the best way: international petrol prices and oil prices are holding out, the exchange rate is in South Africa's favour, and the CPI has been low. 'We believe that this is the perfect time for a rate cut; however, we fear that what's going to happen is that the Reserve Bank will hold the rates steady because of uncertainty in the global environment. It will be very unfortunate for consumers if there isn't a rate cut.'
Sager added that this would be good for consumers, particularly those who are paying for assets like financed vehicles and homes. 'An interest rate cut would also be a good stimulant for the economy and would provide much-needed relief for spending. It might not be good for the lending environment, but it would be good for the consumer environment.'
Neil Roets, the CEO of Debt Rescue, said the SARB could possibly keep interest rates unchanged at this week's MPC meeting. 'The door to a 25 basis point cut is now more open than before - especially with inflation falling to just 2.8%, well below the target range of 3 - 6%. The environment is becoming more favourable for rate relief. The reality on the ground is far more sobering. A 25bps cut would result in a saving of just R254 per month on a R1.5 million bond - and only around R65 per month on a R500,000 vehicle loan.'
Professor Raymond Parsons, a North-West University Business School economist, said the current business cycle in SA suggests there is now a strong case for the MPC to resume its interest rate-easing cycle, by another 25 basis points. 'This will not only be good for business & consumer confidence but, more importantly, there is space now to do so.'
Visit: https://businessreport.co.za/
BUSINESS REPORT
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
6 hours ago
- IOL News
Fuel price rollercoaster continues to impact South African households
A fuel station attendant fills a car with fuel while a dog in the car looks on. While petrol prices drop by 28 cents in August, the sharp increase in diesel costs threatens to worsen South Africa's economic strain. Experts warn that these mixed fuel adjustments, combined with US tariff hikes and record household debt levels, paint a bleak financial outlook for consumers already struggling to make ends meet. Image: Independent Newspapers Archives While consumers in South Africa who are paying back loans were given some financial relief after the South African Reserve Bank (Sarb) cut interest rates, fuel price adjustments for August brings a mixed bag. This past week, the Minister of Mineral and Petroleum Resources announced that from Wednesday, August 6, both grades of petrol decreased by 28 cents, while diesel went up by between 63 cents (50ppm) and 65 cents (500ppm). That means petrol 95 Unleaded will now cost R20.80 at the coast and R21.59 in Gauteng, where the slightly less expensive 93 ULP will retail for R21.51. The wholesale price of 50ppm diesel will reach R19.28 at the coast and R20.04 inland. While the decrease in the price of petrol has been welcomed by some motorists, Neil Roets, CEO of Debt Rescue, said that the broader economic outlook for South Africans remains bleak. 'This fuel price rollercoaster is not easing pressure, it's compounding it. Households are already under extreme strain, and these erratic fluctuations only add to the financial distress,' he told Business Report. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Roets added that the relief felt by petrol users is offset by the sharp diesel price hike of up to 65 cents per litre, which will affect key sectors such as agriculture, logistics, and public transport. 'These ripple effects will inevitably feed into food prices and transport costs, putting even more pressure on working families,' Roets said. Adding to these concerns is the impact of the newly imposed 30% US tariff hike on South African exports. 'This move poses a serious threat to the broader economy, particularly sectors like manufacturing, agriculture, and mining, which are already grappling with rising input costs. If export volumes decline, we could see knock-on effects including job losses and even greater household vulnerability,' Roets said. He further said that with household debt levels already among the highest in the world, and with overdue debt now surpassing R208 billion, South African consumers are being hit from all sides. Roets said the current economic environment is becoming increasingly unstable, with warning signs flashing across every major financial indicator. Meanwhile, Hayley Parry, Money Coach and Facilitator at 1Life's Truth About Money said that the recent interest rate cut was good news for South Africans with debt. "Although the 25 Basis Point decrease does not sound like much from a consumer perspective, there are some interesting opportunities that are presented to us. This means if you take out a R1 million home loan, you will be paying R9 984 per month on that home loan to pay it off for the next 20 years. This means a month ago you would have been paying R168 more on that loan per month. The R168 difference may not sound like a lot, but this is where the power of compound interest comes into play," Parry said. "It is important to get financial education in order to understand what compound interest is and does for consumers. For example, the R168 may not make that much of a difference in paying off your home loan. If you kept your home loan repayment on what it is today, rather than what it will drop by to tomorrow, over the course of 20-year home loan, you will be able to save you more than R89,000 and over a years' worth of repayments. This means you would pay off your home loan in less than 19 years instead of 20 years," she further said. "You will end up saving a significant amount of money in the long run. My challenge to consumers in light of this interest rate reduction is to continue making the same payments they were making before whether it is on a car, home loan, or credit cards. This will help them pay off their debt faster and, once it is cleared, free their monthly cash flow going forward," Parry said. BUSINESS REPORT
IOL News
a day ago
- IOL News
FSCA warns against platform using deep fake videos of Siya Kolisi for investment
, Springbok captain Siya Kolisi Image: BackpagePix The Financial Sector Conduct Authority (FSCA) warned on Friday that individuals are using a deepfake video involving Siya Kolisi and the logos of amongst others, the FSCA, FirstRand and the South African Reserve Bank (SARB) to solicit investments from the public. Kolisi has made history by becoming the first black captain of the South African rugby team, the Springboks and has shot to fame. The FSCA said the public must be cautious when conducting financial services business with an investment platform purporting to be associated with it, the SARB, First Rand Limited and Standard Bank Limited. In the deepfake video Kolisi is seen promoting investments via a platform, where investors are offered unrealistic returns. Investors are offered returns of between R8 000 and R12 000 per day on an investment of R4 400, and monthly returns up to R160 000 a month. The SARB and FirstRand have distanced itself from the deepfake video and are conducting its own internal investigations regarding the use of its details, in what is clearly a deepfake video. The FSCA also confirms that it is not associated with those behind the deepfake videos. The individuals behind the deepfake video did not respond to FSCA enquiries. To avoid unnecessary risk, the public should refrain from accepting financial advice, assistance, or investment offers from individuals or entities not authorised by the FSCA. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading Authorised financial services providers must clearly display their authorisation status in their documentation. If this is not present, it is advised to further investigate before making any payments. It is highly recommended that the public verify that an entity or individual is authorised by the FSCA to provide financial products and services, including for giving recommendations about how to invest. One of the following methods may be used to confirm the status and FSP number of a service provider or a person that claims to be an authorised service provider is a toll-free number: 0800 110 443 or online search for authorised financial institution by license category BUSINESS REPORT
IOL News
a day ago
- IOL News
Empowering journeys of South African women entrepreneurs
Empowered and unstoppable, South African women entrepreneurs share their inspiring stories of resilience and success, proving that with passion and perseverance, anything is possible. Image: Anastasia Shuraeva / Pexels In a landscape where gender disparities still exist, the stories of some of South Africa's leading female entrepreneurs shine brightly, showcasing resilience, passion, and determination. These women, who have blazed trails in their respective fields, offer insights not only into their journeys but also into the challenges and triumphs of being a woman in business. Susan Abro, founder of Susan Abro Attorney, is a South African family law expert who has been practising law for 35 years and, in June, celebrated 30 years of running her firm. Abro attributes her success to the unwavering support of her family and the 'incredible commitment' of her staff. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ 'It's vital to surround yourself with people who share your morals, ethics, principles, and work ethic. Hard work has been at the heart of my journey, along with active involvement in my profession, my community, and women's rights. 'I've also been fortunate to have both male and female mentors who have guided, inspired, and encouraged me throughout my career,' she said. Susan Abro, founder of Susan Abro Attorney, is a distinguished South African expert with 35 years of legal experience. A former chairperson of the Family Law Committee of the Law Society of South Africa and a fellow of the International Academy of Family Lawyers, she has played a pivotal role in introducing Arbitration in Family Law to South Africa. Abro has also presented on critical issues, such as child rights, domestic violence, and family empowerment, both locally and internationally. Image: Supplied However, Abro said, while some attitudes have become more politically correct, many challenges affecting women in the industry today remain the same. 'When I was interviewing for articles at university, I was asked why a firm should invest in me when I might 'just go off and have babies'. 'Years later, when I served as co-chair of the Law Society of South Africa, the glass ceiling was still a frequent topic among women lawyers in leadership, and it still exists today,' she said. Abro said access to finance is another significant barrier, and business remains largely male-dominated. She added that meetings for directors or shareholders often take place in the evenings, which disadvantages women with family responsibilities. 'Achieving parity requires a shift in how we structure and conduct business,' she stated. Abro's advice to women entrepreneurs is to never burn bridges and to always be willing to mentor and support other women. 'We should not see younger women as threats but rather as the next generation to invest in and uplift.' She said throughout her career, she has mentored people from judges to political leaders to business professionals, and the rewards have been immeasurable. Equally important is to never be afraid to approach someone more successful than you for advice, guidance, or help in solving a problem, she said. 'Finally, always maintain an attitude of gratitude by giving back to your community and helping others selflessly. Kindness and gratitude create a ripple effect that inevitably returns to you,' advised Abro. Dr Qinisile Cele, also known as 'Dr Que', is a specialist in Obstetrics, Gynaecology, and Reproductive Medicine and has over 18 years of clinical experience. Cele is the founder and CEO of PreggyCheck, a research-based digital pregnancy health monitor designed to empower families and bridge the gap between healthcare providers and expectant parents. Dr Qinisile Cele is a specialist in Obstetrics, Gynaecology, and Reproductive Medicine, and is also the founder and CEO of the PreggyCheck App. Image: Supplied The mother of four and multi-award-winning medical entrepreneur said purpose and persistence are the keys to her success. 'I didn't set out to build an app; I wanted to solve a real problem I saw in my consulting rooms every day. PreggyCheck was born from years of listening to anxious mothers, confused partners, and overwhelmed clinicians. My success is rooted in that lived experience, paired with clinical excellence, faith, and relentless focus,' said Cele. Cele said she often reminds herself and others that success, much like the tip of an iceberg, is what people see. 'Beneath it lies sacrifice, hard work, and unwavering discipline.' She said challenges still facing women in business are that they are over-mentored and underfunded. 'Women still face real barriers to capital, leadership opportunities, and the kind of structural support that enables long-term growth. 'For those of us building in healthcare and tech — spaces still dominated by male leadership — you need to fight to be heard, taken seriously, and funded adequately,' said Cele. Add to that the weight of caregiving, and it becomes clear that women aren't just running businesses; they're running entire ecosystems with limited support, said Cele. Cele urged up-and-coming women entrepreneurs to fight for what they believe in. 'Trust the value of your vision, even if others don't see it yet. Start, even when the circumstances aren't perfect. Build with both grit and grace. Take rest seriously — burnout is not a badge of honour. And always remember: the people brave enough to try again are the ones who eventually taste the sweetness of success,' she said. Dr Cebi Sibisi, founder of Dr Cebi Dermatology, is a Durban-based dermatologist who provides expert skincare, treats various conditions, and mentors future dermatologists in the state sector. Sibisi said her journey has been rooted in faith, resilience, discipline, and staying focused on her vision, even when things got tough. Dr Cebi Sibisi is a Durban-based dermatologist passionate about making expert skincare accessible. She treats a wide range of conditions, from acne and eczema to hair loss and skin cancer, and offers non-invasive rejuvenation treatments. Image: Supplied She admitted that running a business while also being a mother, a wife, and a friend is no easy feat. 'But through it all, I leaned into my passion, trusted my calling, and kept showing up, even on the hard days. It meant working twice as hard at times, but the unwavering support from my family made all the difference,' she said. She added that learning to manage her time, energy, and purpose has been a key part of her success. Sibisi noted that women entrepreneurs still struggle for recognition and inclusion in the sector, and that fair opportunities are not always accessible. Women are often expected to thrive in business while also carrying the emotional, mental, and physical load of running a household and raising a family, she said. 'What we need is greater recognition, equal opportunity, and the emotional and mental support to sustain our efforts — and most importantly, we need to believe in our worth,' she said. Sibisi advised up-and-coming entrepreneurs to 'start where you are, with what you have'. 'There's no perfect time, so don't wait to feel 'ready.' Your background isn't a barrier — it's your strength and part of your story.' Build a strong support system, invest in your skills, and never stop learning, she added. 'Prioritise your well-being and don't let fear silence your voice. There will be sacrifices along the way, but you are capable and worthy of success. Be consistent, stay focused, and keep showing up every day for yourself and your business,' said Sibisi. Professional hairstylist Michelle Stanton (neé Veaudry), founder and director of Veaudry International, who launched South Africa's first tourmaline and ceramic technology hair styler, believes that what is key to her success is having a clear understanding of the industry she is in and the ability to respond directly to its needs. 'I built Veaudry by identifying what was missing in professional salons and creating tools that met those gaps, without compromising on quality or performance,' she said. Michelle Stanton (neé Veaudry) founder and director of Veaudry International, launched South Africa's first tourmaline and ceramic technology hair styler, called myStyler, in 2006 and continues to lead the brand's product development and innovation. Image: Supplied Stanton said while many women businesswomen face challenges, she has been fortunate not to face significant barriers directly related to her gender in her entrepreneurial journey. 'I've found that when you bring real value, clarity, and a deep understanding of your industry, people take notice — regardless of who you are,' she said. Stanton holds the belief that when women are empowered with confidence, expertise, and the right support systems, there's no limit to what they can achieve. Know your space inside out, advised Stanton. 'Build something with substance and a clear purpose. Don't wait for validation, get started, stay consistent, and back yourself.' She added that building a brand requires more than just a good product; it demands long-term commitment and the ability to evolve without losing focus. 'I've remained involved in every stage of the business, and that level of attention has been critical to sustaining Veaudry's standards and reputation,' she said.
