OFFICIAL INTEREST RATE REDUCED
The South African Reserve Bank reduced the repo rate by 25 basis points to 6.75% per annum with effect 20 July 2017. This means that the rate at which the SARB lends to your bank has decreased from 7.00% to 6.75% per annum.
Employers must take note that it affects their official interest rates on payrolls and this decreased to 7.75 %. Please adjust it effective 1 August 2017.
The definition of “official interest rate” in the Seventh schedule of the ITA means:
- In the case of a loan which is denominated in the currency of the Republic, the South African repurchase (repo) rate + 100 basis points; or
- In the case of a loan which is denominated in any other currency, the South African repurchase rate applicable in that currency +100 basis points.
Where a new repurchase rate or equivalent rate is determined, the new interest rate applies for the purposes of this definition from the first day of the month following the date on which that new repurchase rate or equivalent rate comes into operation.
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