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The Inkatha Freedom Party (IFP) welcomes the South African Reserve Bank’s decision to maintain the repo rate at 6.75%, following its earlier reduction from 7.00%. This rate remains the lowest level in over two years and continues to provide some relief to households and businesses navigating a constrained and uncertain economic environment. The corresponding prime lending rate of 10.25% offers modest breathing room for consumers, homeowners and enterprises under sustained cost pressures.

When the repo rate was initially reduced to 6.75%, the IFP welcomed the move as a necessary response to easing inflationary pressures, a stronger rand and lower oil price assumptions. The Monetary Policy Committee’s current decision to hold the rate reflects a cautious but responsible approach amid heightened global volatility, domestic supply-side risks and persistent structural weaknesses in the South African economy.

The IFP notes the Reserve Bank’s assessment that economic conditions are improving but remain fragile. Inflation expectations are anchored and within the target range; however, risks such as rising administered prices, electricity costs, food inflation and geopolitical instability continue to weigh on households and growth prospects. 

The IFP emphasises that monetary policy alone cannot place South Africa on a sustainable growth path. As the Governor correctly observed, the economy is performing “better, but not yet healthy.” Without decisive and coordinated government action, marginal improvements in macroeconomic indicators will not translate into meaningful improvements in people’s daily lives.

While the current interest rate environment provides short-term relief, bold fiscal and structural reforms remain urgently required. The IFP reiterates its call for:

Targeted support for households and consumers, including efforts to stabilise administered prices and reduce the cost of essential services.

Reviving investment and business confidence through policy certainty, reliable energy supply, and a genuinely investor-friendly regulatory environment.

Stronger support for SMMEs, particularly improved access to finance and the removal of bureaucratic barriers that stifle entrepreneurship and job creation.

Improved access to housing and property ownership, addressing affordability challenges, high municipal costs and slow delivery for first-time homebuyers.

The IFP recognises the positive signals emerging within the economy but maintains that significantly more must be done to unlock inclusive growth, boost investment and protect vulnerable households. A stable monetary stance must be complemented by disciplined fiscal management, accelerated reforms and capable state institutions.

Sustainable economic recovery requires coordinated monetary and fiscal policy, policy certainty, and a clear commitment to rebuilding confidence in the South African economy. The IFP remains committed to advancing these objectives in the interests of all South Africans.

Issued by IFP Parliamentary Caucus Chief Whip Member of the Standing Committee on Finance Nhlanhla Hadebe