Repo rate

The South African Reserve Bank raised the repo rate by 0.25%, taking the prime lending rate in the country to 10.75%

“Achieving a prudent public debt level, increasing the supply of energy, moderating administered price inflation and keeping wage growth in line with productivity gains would enhance the effectiveness of monetary policy and its transmission to the broader economy. Our forecast for core inflation is somewhat lower at 5.2% in 2023 (down from 5.5%) and 4.7% in 2024 (down from 4.8%),” Kganyago said. “Domestic food price inflation continues to surprise higher. In this uncertain environment, monetary policy decisions will continue to be data dependent and sensitive to the balance of risks to the outlook,” Kganyago said. “As this year commences, high inflation & weak economic growth continue to shape global conditions. “The Bank’s forecast of headline inflation for 2023 is unchanged at 5.4% and is slightly higher at 4.8% for 2024.

The country's energy crisis stands to shave two percentage points off growth in 2023.

These factors, as well as declining commodity prices, have resulted in the Reserve Bank halving its 2024 growth forecast to 0.7%, down from 1.4% previously. At the November meeting, the bank predicted that load-shedding would shave 0.6 percentage points from growth in 2023. Food price inflation is expected to be 7.3% in 2023, up from 6.2%. The domestic currency is, however, far stronger than in the two months leading up to that meeting, as the dollar’s strength has remained subdued amid US recession fears. Inflation has been sticky so far in South Africa and globally, Bishop said, but the first half of this year is expected to see inflation measures fall (disinflation) more rapidly. It is forecast to fall to -2.7% in 2023 (down from 0.7%). Fuel price inflation, which was the major driver of headline inflation in 2022, averaged 34.5% last year. Inflation cooled for a second consecutive month in December to 7.2% year-on-year, marking the slowest annual increase since May 2022. “It is because the people of this country decided that.” Investec forecasts that inflation will average 5.3% year-on-year in 2023. High inflation is not a growth strategy … High inflation is not an employment strategy.”

South Africans will have to pay more for their loan, mortgage and other credit repayments. Screengrab from ...

"The MPC decided to increase the repurchase rate by 25 basis points to 7.25% per annum with effect from the 27th of January 2023. JOHANNESBURG - The repo rate has been raised by 25 basis points. Repo rate goes up by 25 basis points

The South African Reserve Bank has announced an increase of the repo rate 25 basis points.

Bruce Whitfield speaks to economist, Gina Schoeman, and Saftu General Secretary, Zwelinzima Vavi, on the country's new repo rate.

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It's the eighth consecutive increase, which will see consumers pay more for their home loans, car finance and other debts.

It's the eighth consecutive increase, which will see consumers pay more for their home loans, car finance and other debts.

You will have to pay more to service your home loans, vehicle installment and credit debts as the Reserve Bank hikes the repurchase rate.

With 81% of households battling to put enough food on the table, how much longer can people realistically hold out?” he said. South Africans have yet to feel any relief on their pockets when shopping for food, while the rest of the world has benefitted from decreases in the prices of food items, reflecting the effect of falling global prices and improved supply chains. “We forecast no growth in the fourth quarter. Reserve Bank governor Lesetja Kganyago on Thursday announced that the repurchase rate had been increased by 25 basis points to 7.25% per year, with effect from Thursday. “The aim of policy is to anchor inflation expectations more firmly around the midpoint of the target band and to increase confidence of attaining the inflation target sustainably over time.” The purchase rate is the rate at which the commercial banks are charged when they borrow money from the Reserve Bank.

With the latest increase in the repo rate, home owners are expected to dig deeper into their pockets to pay back their bonds.

With the latest increase in the repo rate, home owners are expected to dig deeper into their pockets to pay back their bonds. The five-member committee factored in high inflation, power cuts and poor economic growth in its decision, which will see the repo rate increase to 7.25%. JOHANNESBURG - The chairperson of the Seeff Property Group, Samuel Seeff, said that homeowners were likely to feel the pinch from the latest increase in the repo rate.