Guiding consumers since 2009

Last interest rates meetings for Tito

By Staff Writer

The Guv, Tito Mboweni has already had his farewell dinner from the Reserve Bank. He is only leaving in November and between now and then there are still three meetings of the Monetary Policy Committee. The MPC under Mboweni has been pursuing a policy of inflation targeting via interest rates. First they put them up and then they cut them, and recently they have been holding them. Few economists believe that there will be a cut this time around, so what are the factors involved?

 

  • Inflation is coming down
  • Marcus replacing Mboweni
  • No policy changes in sight

 

Inflation targeting is a slow process as interest rate changes take months to filter into the economy. Cuts that were made at the beginning of the year are only now starting to manifest in the day to day economy. The high interest rates that we suffered helped to bring down credit spending and just in time to avoid the worst of the global financial crisis. They have not been popular but interest rate manipulation should not be confused with populist. Populists may cry out against interest rates but they favour those with large borrowings not workers.

The fact is interest rate manipulation has helped to slow inflation, and low inflation is in the interests of the poor. When you spend on credit essentially buying today on the promise of future earning you overheat the economy and a crash is inevitable. The National Credit Act also helped to slow our profligate spending just at the right time. So people are buying less on credit, inflation is cooling down and The Guv still has another three meetings in which to pursue his mandated policy. Recent polls suggest that most economists do not expect a cut to be forthcoming and that the Reserve Bank already lies in the hands of the New Guv, Gill Marcus.

Recent Articles

Featured What’s the deal with underwriting?

When you apply for a long-term insurance policy, a financial adviser will ask some personal questions about your lifestyle, family history, health, and even ask you to take some medical tests. This process is called underwriting, but is it really necessary?

 

How are you taxed on your retrenchment package?

Unemployment is one of the biggest problems in South Africa. The emergence of the Covid-19 pandemic has exacerbated the situation with a lot of companies retrenching their employees.  When retrenched, you’ll receive a retrenchment package, but do you know how much tax you’re liable for?

Car repossessed – don’t be taken for a ride

When the country is facing an economic downturn, chances are your finances will feel the pinch. This can lead you to make bad financial decisions such as skipping your vehicle payments. But every decision has consequences and if you don’t pay your instalment, the bank will repossess your car. But what can you do when this happens?

 

Why you should consider gap cover

Your medical aid should protect you from incurring large medical bills when you’re sick. But what if your plan doesn’t cover the full cost of your medical expenses? We got in touch with insurance experts to find out whether gap cover is worth having.

Deals

Office furniture at discounted prices at BDK

Price: Available on request
When: Daily
Where: Johannesburg

Da Vincis Happy Hour Special

Price: Available on request
When: Daily
Where: Cape Town

Use your Absa card and get 30% cashback at Dis-chem

Price: Available on request
When: Daily
Where: Nationwide


Latest Guide

Guide to debt rehabilitation solutions