South Africa's Reserve Bank raises its repo rate to 7.25%
A renewed fuel-price shock pushes the prime lending rate to 10.75%.
Key points
- The South African Reserve Bank raised its repo rate by 25 basis points to 7.25% on 23 September 2026, effective 25 September; the decision was unanimous.
- Governor Lesetja Kganyago cited an intensifying fuel-price shock. Inflation rose to 4.4% in August, above the new 3% target.
- The prime lending rate rises to 10.75%, while GDP contracted 0.2% in the second quarter.
The South African Reserve Bank (SARB) raised its repo rate by 25 basis points to 7.25% on 23 September 2026. The decision by the Monetary Policy Committee was unanimous and took effect on 25 September.
The increase takes the prime lending rate charged by commercial banks to 10.75%, which means higher repayments on home loans, car finance and other variable-rate debt.
Why the Reserve Bank moved
Governor Lesetja Kganyago pointed to a renewed fuel-price shock. The committee said the conflict in the Middle East had escalated since its previous meeting, while the war in Ukraine continued to disrupt global refining capacity.
"A few months back, it seemed that the fuel-price shock might be unwinding, but now it has intensified," Kganyago said, as reported by Moneyweb.
Consumer price inflation rose to 4.4% in August 2026 from 4.3% in July. Kganyago noted that this was 140 basis points above the Reserve Bank's new 3% inflation target.
A weak economy
The hike comes while South Africa's economy is struggling. GDP contracted by 0.2% in the second quarter, although the Reserve Bank expects a recovery in the second half of the year and growth of about 1.2% for 2026.
It is the second rate increase this year, and it runs against the trend elsewhere on the continent. A day earlier, Nigeria's central bank cut its benchmark rate by 350 basis points.
Sources
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