Repo Rate Hike
Reserve Bank Raises Repo Rate
The SA Reserve Bank has decided to push up the Repo Rate by 0.25 points taking the rate to 6.75% in the first increase in two years.
There was a lot of debate leading up to the announcement as different experts either predicted that the rate would remain the same and only increase next year or would increase this year in the face of mounting economic pressure.
Weak Rand, Expensive Oil
The Rand has been dropping in value over the last few years int he face of the worldwide economic crisis, high levels of government corruption and mass unemployment bringing in less income for the government. A weaker Rand also hurts when it comes to buying oil in dollar prices. All these factors (and more) have moved the Monetary Policy Committee to push up the Repo Rate which will have a knock-on effect on the rates that credit providers ask from consumers for their debts.