Update, 23 September 2026: the decision is in — the MPC raised the repo rate by 25 basis points to 7.25%, taking prime to 10.75%, on a unanimous vote. The first of BofA's two called hikes has landed; see the September 2026 outcome.
Days before the SARB's 23 September decision, Bank of America went where no other major forecaster had: it expected two 25 basis point repo rate hikes in 2026, lifting the repo rate from 7.00% to 7.50% and prime from 10.50% to 11.00% by year-end — a call Bloomberg labelled an outlier. The first hike has now landed: on 23 September 2026 the MPC raised the repo rate to 7.25%, taking prime to 10.75%.
Is the repo rate going to increase in 2026?
According to Bank of America, yes — twice. Reported by Bloomberg on 21 September 2026 and picked up by Moneyweb, BofA sees the Monetary Policy Committee raising the policy rate by 25 basis points at each of the two meetings then remaining in 2026 (23 September and 19 November 2026), taking the repo rate to 7.50% by December. The first landed on 23 September, when the committee hiked to 7.25%. Bloomberg's own framing called the bank an outlier: other analysts expect a hold or at most a single hike, and the verified data into the 23 September meeting pulls in both directions — record petrol price increases feeding inflation on one side, a Q2 GDP contraction on the other. bond.co.za does not make rate predictions; BofA's path is a forecast, and forecasts disagree with each other.
What is the repo rate now?
The repo rate is 7.25% and prime is 10.75% (SARB, re-verified 2026-09-23). The MPC last moved on 23 September 2026, raising the rate by 25 basis points to 7.25% (prime 10.75%), effective 25 September, on a unanimous vote — after holding on 23 July by a narrow 4-2 vote, citing oil and food-price risks. The committee's remaining 2026 announcement is 19 November 2026.
What is the expected prime interest rate in South Africa in 2026?
Before the decision, consensus expectations had prime ending 2026 at or near 10.50%. Bank of America's two-hike path was the outlier — and its first leg has landed, with prime stepping from 10.50% to 10.75% on 23 September. If the remaining leg and a further hike follow, prime would step to 11.00% and then 11.25% by year-end. For borrowers, that is the difference between today's instalment and roughly R 340 more a month on a R1 million bond — the scenario bond.co.za has computed below on our own bond maths, assuming a 20-year term priced at prime:
| Bond | At prime 10.75% | After one hike (11.00%) | After two hikes (11.25%) | Monthly increase |
|---|---|---|---|---|
| R 1 000 000 | R 10 152 | R 10 322 | R 10 493 | +R 340 |
| R 1 500 000 | R 15 228 | R 15 483 | R 15 739 | +R 510 |
| R 2 000 000 | R 20 305 | R 20 644 | R 20 985 | +R 681 |
These are budgeting scenarios, not forecasts — the same maths behind our rate-change repayment table. If you are applying now, remember a bank pre-approval is typically priced at the prime of the day it is issued — worth knowing in a week like this one.
Will interest rates drop to 3% again?
Not on any current forecast — and not while inflation sits above target. The SARB's May 2026 projections have headline inflation averaging 4.4% in 2026 and 3.7% in 2027, only returning to the 3% midpoint of the target band in 2028. A 3% repo rate would need inflation durably at the midpoint with weak demand — the conditions of the 2020 cuts, not of a year in which at least one major bank expects hikes. For planning purposes, a realistic band for prime runs from roughly 10.75% to 11.00% over the next year, not down towards 6.5%.
Rate figures from the South African Reserve Bank via lib/rates.ts, re-verified 2026-09-23. Bank of America's two-hike forecast as reported by Bloomberg (21 Sep 2026) and Moneyweb (21 Sep 2026); inflation forecasts from the SARB May 2026 Monetary Policy Statement. Repayment scenarios computed by bond.co.za (20-year term, prime-linked, standard annuity) — illustrative only. Last verified: 2026-09-23.