FX.co ★ South Africa Trims Key Policy Rate as Expected

The South African Reserve Bank reduced its primary repo rate by 25 basis points to 6.75% on November 20, 2025, as largely expected, following a period of maintaining it at 6.50% since September. This decision was reached unanimously, with officials in consensus that the current policy environment supports easing due to a more favorable inflation outlook and balanced growth risks. Although inflation has shown a slight increase in recent months, accelerating to 3.6% in October, policymakers anticipate this to be a temporary rise, projecting inflation will remain aligned with the new medium-term target of 3%. The inflation forecasts for 2025 and 2026 have been marginally adjusted downward to 3.3% from 3.4% and 3.5% from 3.6%, respectively. In terms of economic activity, the SARB has adjusted its growth forecast for 2025 to 1.3%, up from 1.2%, while keeping the estimate for 2026 steady at 1.4%. Looking forward, the central bank stated that its Quarterly Projection Model continues to predict gradual rate reductions as inflation declines.