What is the current prime interest rate in South Africa?
As of July 2026, the current prime interest rate in South Africa is 10.50%. This follows the South African Reserve Bank’s first rate hike in years on May 28, 2026, increasing the repo rate from 6.75% to 7.00%.
How the prime rate is determined
The SARB controls the repo rate, which is the interest rate at which it lends money to South African banks. The prime rate is calculated as the repo rate plus 3.50%, which is the bank’s standard margin.
Current rates:
- Repo rate: 7.00%
- Prime lending rate: 10.50%
Recent rate changes timeline
- September 2024: Prime cut from 11.75% to 11.50%.
- November 2024: Prime lowered to 11.25%.
- January 2025: Prime cut to 11.00%.
- May 2025: Prime reduced to 10.75%.
- July 31, 2025: Prime cut to 10.50%.
- November 20, 2025: Prime cut to 10.25%
- May 28, 2026: Prime raised to 10.50%
This represents a total reduction of 1.25% since September 2024.
What’s driving these changes?
- Rising inflation: April 2026 inflation rose to 4%, up from 3.1% in March.
- New inflation target: SARB now targeting 3% (bottom of 3-6% range) instead of 4.5%.
- The SARB’s need to stabilise the economy: Rates have been hiked to manage rising inflation.
- Global uncertainty: Recent global conflicts and supply chain disruptions have caused additional pressures.
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