The South African Reserve Bank has published a consultation paper proposing to discontinue the prime lending rate (PLR) and designate the SARB policy rate (SPR), commonly known as the repurchase rate, as the replacement reference rate for PLR-linked financial contracts. The proposal is intended to strengthen the link between monetary policy and lending rates and reduce public misunderstandings about how loan pricing is set. The paper frames the change as part of broader work to modernise South Africa’s interest rate benchmarks and align with international practices, noting that the PLR has become detached from its original role as a base rate for pricing credit. Since 2001, the PLR has functioned as an administrative reference set at a fixed spread of 350 basis points above the SPR. It also explains that using the term “SARB policy rate” reflects changes in the monetary policy implementation framework, including the 2022 transition from a structural shortage to a surplus framework. A migration from PLR to SPR as a key lending-rate reference is expected only after the cessation of the Johannesburg Interbank Average Rate (Jibar) and would be managed through measures including fallback language in new contracts, legislative safe harbour provisions for legacy contracts, and stakeholder engagement. Comments on the proposed cessation of the PLR are requested by 20 March 2026.
South African Reserve Bank 2026-02-16
South African Reserve Bank consults on discontinuing the prime lending rate and replacing it with the SARB policy rate
The South African Reserve Bank proposes replacing the prime lending rate (PLR) with the SARB policy rate (SPR) for PLR-linked financial contracts. This change aims to better align monetary policy with lending rates and modernize interest rate benchmarks. The transition from PLR to SPR will follow the cessation of the Johannesburg Interbank Average Rate (Jibar) and involve measures like fallback language in contracts and legislative provisions.