Reserve Bank expected to lift prime rate to 10,75% this week
A quarter-point hike would add about R336 a month to the instalment on a R1 million home loan, as oil above $100 a barrel keeps inflation pressure on.
The Reserve Bank is widely expected to raise interest rates by 25 basis points at its meeting this week, taking the prime lending rate from 10,5% to 10,75%.
The consensus among analysts is firm, according to eNCA’s market discussion on Monday. Morgan Stanley, which had expected the bank to hold, now expects a hike. Nobody in the market is calling for more than a quarter of a percentage point, and a half-point move would surprise the market.
A quarter of a percentage point is the same as 25 basis points.
The pressure comes from fuel. Oil prices spiked above $100 a barrel about ten days ago and have stayed high, even after easing to roughly $101 a barrel on Monday. Before the conflict that pushed them up, they were below $70. Central banks work on averages, not on a single day’s drop, so one softer session does not change the inflation outlook.
What it costs a household
On a R1 million home loan with no deposit, the monthly instalment sat at R9 816 in April, when the prime rate was 10,25%. It rose after the May hike, and at 10,75% it would pass R10 000, at R10 152.
The difference between April and this week works out to R336 a month.
That is roughly a quarter of a tank of fuel, or some of the month’s groceries, or a night out that no longer happens. Higher-value homes carry a bigger increase.
The Reserve Bank raised rates in May in what looked like a pre-emptive move against coming inflation. It meets every second month. In June and July the market expected another hike and the bank held, which confused the market somewhat. The expectation now is settled on 25 basis points.
Where the oil price is heading
Oil has been expensive for a long stretch, and economies and consumers have had to absorb that. Traders have clung to any sign of relief.
One possible source is diplomacy. US President Donald Trump has said he will probably be open to meeting Iranian President Masoud Pezeshkian during this week’s UN General Assembly, and he may also meet his Chinese counterpart, who has been involved on the sidelines of the Middle East conflict. Iran has often said afterwards that no talks were planned.
Fuel price forecasts for early October are expected in the coming days.
Source: eNCA (YouTube), Number Of The Day | 25 | 21 September 2026
