The South African Reserve Bank (SARB) is anticipated to implement further interest rate cuts during its November 2024 Monetary Policy Committee meeting. This follows recent dovish trends and easing inflation, now down to 3.8% as of September, its lowest in over three years and below the midpoint target of 4.5%. While predictions vary, some experts, including Goldman Sachs, expect a substantial 50 basis point cut, pointing to the strengthening rand and declining inflation as supportive factors. Other institutions, like Bloomberg Economics, foresee more conservative, incremental cuts of 25 basis points, aligning with SARB’s cautious approach to avoid market volatility.

SARB Governor Lesetja Kganyago has suggested that policy space exists for rate cuts, but he emphasises a prudent strategy to maintain financial stability amid global uncertainties. The expected rate cut aims to balance domestic economic growth support with caution around inflation risks and currency fluctuations.

Potential rate reductions would significantly impact bond repayments. For example, Ooba Home Loans data shows that for the average home priced at R1,458,924, monthly repayments could decrease from R15,558 to R15,059, saving homeowners R499. A 20-year bond on higher-priced properties could yield more substantial savings, such as R1,712 monthly on a R5 million bond. These adjustments provide financial relief to consumers and businesses, potentially stimulating economic activity heading into 2025, without compromising SARB’s inflation-targeting mandate.