On Wednesday, 23 September 2026, the Monetary Policy Committee of the South African Reserve Bank (SARB) has again convened for their bi-monthly meeting to discuss the interest rates. As a result, South African borrowers have once again been prescribed monetary medicine for an illness they might develop later.
SARB raised the repo rate by 25 basis points to 7.25%, lifting the linked prime-lending rate to 10.75%. The reason? Mainly only because of what could happen:
Oil prices could rise further. Middle East tensions could worsen. Higher fuel costs could spread through the economy. Inflation expectations could increase. Headline inflation, currently 4.4%, could exceed 5% …
Meanwhile, the Economy we actually have — rather than the one we fear — contracted 0.2% in Q2, prompting SARB to cut its 2026 growth forecast from 1.4% to 1.2%, and Food Inflation is exceptionally low, Core Goods Inflation remains contained and the Rand has proved remarkably resilient. But apparently prevention is better than growth.
Higher rates now make mortgages, business finance and investment more expensive precisely when South Africa desperately needs stronger demand, capital expenditure and job creation.
SARB’s baseline thankfully does not presently envisage another immediate hike. If oil stabilises, rates could eventually decline as inflation moves back towards the 3% target.
But until then, South Africa gets an unusual economic insurance policy: weaken today’s already struggling economy to protect it against tomorrow’s possible inflation. Prudent? Perhaps, but it does feel rather like pulling up the handbrake because someone spotted a speed bump three suburbs away.