Repo Rate Stays The Same For Now
The South African Reserve Bank has decided to keep the Repo Rate unchanged at 6.75%.
This month (Thursday 28th) the Reserve Bank Governor Lesetja Kganyago made the announcement and said that the decision is based on a few factors such as inflation (for food and electricity etc) staying stable at 4.4%; a slightly lower than expected GDP projections, an increase in the price of Brent crude (oil). They also expect to see the world economy slow down and see more problems ahead with things like loadshedding and a decline in business confidence.
Why Should You Care?
All other lending rates are linked to the Repo Rate. If the repo rate goes up or down then the rate you pay on your house, car or credit card will also likely shift up or down (if linked). Because these other rates are worked out at the repo rate times a certain amount a small increase in the repo rate can mean a big increase in your interest rates. This, in turn, can mean a lot more money being asked of you for all your different credit accounts.
Repo Rate at 6.75%
A Future Increase?
There is however a projected 25 base point increase pending by the end of the year meaning that the Repo Rate will then potentially be at 7% by December.