South African Reserve Bank’s Monetary Policy Committee (MPC) has decided to increase the repo rate by 25 basis points moving it from 3.50% to 3.75%.
This is the first increase since the Reserve Bank cut its rate to a record low. The Reserve Bank Governor, Lesetja Kganyago has further indicated that more interest rate hikes should be expected in each quarter of 2022 and 2024.
This can be seen as a positive response to the strengthening the Rand in the long run and keeping inflation in check. The Rand’s recovery against the dollar could possibly offset the rising oil prices to try control fuel prices.
On the downside, this means that you will pay more for your bond repayment, credit card and other loans which have been advanced to you as a consumer. On the up side, you could get a slightly higher interest return on fixed deposits and interest bearing savings made.
