Monetary Policy Committee (MPC) last week cut the repo rate by 25 basis points to 8% per annum,

𝐖𝐡𝐚𝐭 𝐢𝐬 𝐚 𝐫𝐞𝐩𝐨 𝐫𝐚𝐭𝐞?

The South African Reserve Bank (SARB) lends money to South African banks at a rate known as the repo rate. Banks lend money to their clients at a rate called the prime interest rate.

The prime interest rate is linked to the repo rate. So, when the repo rate changes, the prime interest rate also changes. 

Repo rate: 8.00%

Prime interest rate: 11.50%

Effective from 20 September 2024
 

*Note: Rates are updated based on SARB Monetary Policy Committee (MPC) decisions and may be delayed. The next MPC meeting will be on 21 November 2024.

𝐔𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠 𝐭𝐡𝐞 𝐢𝐦𝐩𝐚𝐜𝐭 𝐟𝐨𝐫 𝐲𝐨𝐮?

When the repo rate increases, the following happens:

Interest rates on your home or car loans will increase, which in turn will increase the monthly repayments.*
Interest rates on your savings or investments will also change. Banks may offer higher interest rates for saving money, which is an advantage if you have extra money to save.
When the repo rate decreases, the opposite happens:

Interest rates on your home or car loans will decrease, which in turn will decrease the monthly repayments. 
Interest rates on your savings or investments will also change. Banks may offer lower interest rates for saving money.