The Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) has increased the repurchase (repo) rate by 50 basis points. The announcement was made on Thursday, 25 May 2023.

The repo rate has been raised to 8.25% per year, effective from 26 May 2023. This means that the rate at which the SARB lends to banks has risen from 7.75% to 8.25%.

This is the highest interest rate we have seen since April 2009.

For employers, the official interest rate applicable to payrolls will be 9.25%, effective from 1 June 2023.

The implementation of this rate change will in most cases require a change to your payroll system parameters. Please be sure to implement this change as penalties and interest could be levied by SARS if not implemented timeously.

To view the MPC’s statement, click here.