UASA Media Release: 31 July 2025
Picture source: South African Reserve Bank (SARB).
Statement by Abigail Moyo, spokesperson of the trade union UASA:
UASA is pleased to note the South African Reserve Bank’s (SARB) decision to cut the repo rate by 25 basis points, bringing it to 7% – the lowest since November 2022. Since September 2024, the repo rate has declined by a total of 125 basis points, and the prime lending rate now stands at 10.50%.
The SARB’s monetary policy committee has introduced a new inflation target of 3% for consumer prices, replacing the previous target of 4.5%. This change means there are unlikely to be further rate cuts in the near future, but it establishes a foundation for greater economic stability in the years ahead. Although economic growth for 2025 is now projected at 0.9% (down from 1%), the expectation is that growth could reach 2% by 2027, compared to the earlier forecast of 1.8%.
A lower inflation target could also strengthen the rand against the US dollar and may allow interest rates to decrease further over time. If the CPI is maintained at 3%, the repo rate might reach 5.5% by 2027.
For South Africans, a consistent 3% inflation target should help keep the rise in prices—including electricity and essential goods—under control and may see salary increases settling in the 3-4% range.
SARB Governor Lesetja Kganyago has also highlighted ongoing discussions with the national treasury regarding the country’s inflation targeting framework, specifically whether to adopt a fixed point or a range.
UASA is pleased that today’s repo rate cut will ease workers’ financial stress while they bear the cost of heating homes and water during the last stretch of winter.
For further enquiries or to set up a personal interview, contact Abigail Moyo at 065 170 0162.