Repo Rate To Be Cut Again?
July 2020 Repo Rate Cut Coming?
Experts speculate that the SA Repo Rate will once again be cut this month to another record low due to the Covid-19 pandemic.
The Repo Rate (which banks borrow money at and then fix their lending rates to) has already been cut 4 times during 2020. This is primarily due to the Covid-19 pandemic and national lockdown which is in place to try to regulate the spread of the virus and demand for hospital treatment.
‘At present, the rate sits at 3.75%’
In March and April, there were 2 100 basis point cuts and a 50 point cut in May. At present, the rate sits at 3.75% and many experts are predicting that there will at least be a 25 basis point cut again – bringing the rate to a new all-time low of 3.5%.
Not all experts agree (do they ever?) and some feel it is more likely that the SA Reserve Bank will adopt a wait and see attitude leaving the rate at the low it has already reached. This is because they feel that inflation has stalled at around 2.1% for now which is well within the SARB’s expected range.
‘The announcement will be made within a few days’
The announcement will be made within a few days and consumers who are having a hard time repaying all their credit agreements (basically everyone) are holding on to see if there will be some additional relief in store during what has been a disastrous financial year.