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Possible Repo Rate Cut This Week

The Repo rate is the rate that the central bank lends money to the banks which most consumers regularly deal with. They use that rate and bump it up to make a profit from their clients who wish to borrow money from them. When the Repo Rate goes up this means consumers pay more for the debts they have and when it comes down it means consumers end up paying less for their debt each month.

In May this year, the South African Reserve Bank’s Monetary Policy Committee (known as the MPC) were close to reducing the Repo Rate but the vote ended up keeping it stable instead.

Many economists now feel that there will be a cut to the rate this month due to several economic factors such as the current inflation rate and the pressure mounting on consumers through Eskom tariff hikes etc.

The pending rate cut, should it happen, looks set to perhaps stay in place until the end of 2021 barring some massive economic change locally or internationally. This means that this month’s MPC meeting and the announcement is set to have big ramifications to credit users for many months ahead.

The announcement should be made on Thursday 18th July 2019.