FINANCIAL SECTOR: SARB TO REPLACE PRIME LENDING RATE WITH REPO RATE?

FINANCIAL SECTOR: SARB TO REPLACE PRIME LENDING RATE WITH REPO RATE?

• 17 February 2026
• Financial Sector
• SA Legal Academy

The South African Reserve Bank (SARB) has called for input by 20 March 2026 on a discussion document exploring the the prime lending rate’s (PLR’s) possible replacement with the SARB policy rate [‘commonly known as the repurchase (repo) rate’].

According to an accompanying media statement, making the repo rate the reference rate for PLR-linked financial contracts would:

• ensure ‘a clearer link between monetary policy and lending rates’, and
• improve ‘public understanding of loan pricing mechanisms’.

As ‘part of ongoing efforts to modernise South Africa’s interest rate benchmarks … (in line) with international best practice’, the reform now envisaged would address ‘widespread misconceptions’ about the PLR’s function. This is noting that ‘the PLR has become detached from its original purpose as the base rate for pricing credit’.

The proposed transition would take place after the cessation of the Johannesburg Interbank Average Rate (Jibar), which will take place after its final publication on 31 December 2026.

• discussion paper
• media statement
• SARB statement on Jibar cessation date 

Published by SA Legal Academy Policy Watch

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