South African Reserve Bank (Sarb) governor Lesetja Kganyago announced on Thursday that the repo rate will increase by 25 basis points to 3.75%.
The MPC decided to increase the repurchase rate by 25 basis points to 3.75% pic.twitter.com/Naxzyhei29
— SA Reserve Bank (@SAReserveBank) November 18, 2021
“For this year and the next two years, headline consumer price inflation is revised slightly higher, to 4.5% for 2021 (from 4.4%), to 4.3% next year (from 4.2%), and to 4.6% in 2023 (from 4.5%). Headline CPI for 2024 is expected to be 4.5%,” he added.
“The risks to the short-term inflation outlook are assessed to the upside. Global producer price and food price inflation continued to surprise higher in recent months and could do so again. Oil prices have increased sharply, with current prices well above our forecasted levels for this year,” said Kganyago.
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The announcement come less than a month before the festive season, Ayanda Ndimande, Strategic Business Development Manager at Sanlam spoke to Gugulethu Mfuphi on Kaya Biz, giving caution to consumers on the tough times ahead.
“It’s time to buckle up, the Reserve Bank has increase by 25 basis points to 3.75% and the prime landing rate to will increase to 7.25%.
“This has some implications for South Africans, especially those with bonds, who have been riding the benefits of an unchanged repo rate for 2 years, and increase in the repo rate means an increase in the cost of credit. Many consumers will feel the pinch.”
“Before taking out any further credit, check your credit score, reduce your debt as much as possible, and budget well to ensure there’s sufficient affordability.”
Kganyago also highlighted the causes and effects of the repo rate going up and what is the projected future for South Africans consumers.
“The July unrest, the Covid-19 pandemic and ongoing energy supply constraints are likely to have lasting effects on investor confidence and job creation, impeding recovery in labour-intensive sectors hardest hit by the lockdowns,”
“High export prices are expected to fade, perhaps faster than previously expected,” he cautioned.
“Very weak job creation will moderate household consumption. Investment will remain constrained by the high risk of further load shedding and ongoing uncertainty,” said Kganyago
Written by: Zuko
High export prices Kganyago Price are going up South African Reserve Bank (Sarb) South Africans consumers.
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