Guiding consumers since 2009

Repo rate remains at 7%

By Jessica Anne Wood

The Monetary Policy Committee (MPC) announced that the repo rate will remain at 7%. Lesetja Kganyago, governor of the South African Reserve Bank (SARB), said: “The MPC has decided to keep the repurchase rate unchanged at 7% per annum. Five members preferred an unchanged stance and one member preferred a 25 basis point reduction.”

“The MPC is of the view that we may have reached the end of the tightening cycle. However, the Committee would like to see a more sustained improvement in the inflation outlook before reducing rates. This assessment may, however, change if the inflation outlook and the risks to the outlook deteriorate,” added Kganyago.

Following the announcement, First National Bank (FNB) confirmed that its prime lending rate would remain at 10.5% until the next MPC meeting in May.

Jacques Celliers, FNB CEO, said: “With inflation still above 6% but now on a downward path, consumers are eagerly anticipating lower rates. However, the risk of price-shocks may still arise from negative commentary by ratings agencies in mid-2017 and Brexit. For these reasons, we urge consumers to build their budgets based on rates stability. While a rate cut will certainly lift consumer confidence, we should not begin ‘pricing-in’ lower rates until greater certainty emerges.”

Sizwe Nxedlana, chief economist at FNB, added: “While the MPC opted to keep rates unchanged today, the dovish tone of the statement certainly suggests that the bank is less worried about the inflation outlook than it has been in previous months. Downward revisions to the inflation forecast and the weak growth outlook signalled the end of the hiking cycle. However, the MPC will  tread cautiously once again  as it remains cognisant of  policy tightening by the Federal Reserve and the possible upside risk to the rand and consequently  inflation, should fed policy action become more aggressive than is currently assumed. Another concern will be the recent rise in political uncertainty surrounding the finance minister’s future and the potential impact that this can have on the Rand and inflation. The recent political uncertainty and the associated Rand weakness has reduced the odds of a rate cut later this year - for now.”

Recent Articles

Featured Personal loan or business loan? The best way to finance your business

When starting your own business, you may have to rely on external funding. Perhaps you qualify for a personal loan, but would it be better to take out a business loan instead? We got in touch with a specialist to find out whether it’s best to take out a business loan or a personal loan to assist you with your ongoing business or start-up.

What to do when you’ve been denied a home loan

After months of scanning property sites and attending showhouse after showhouse, you’ve finally found what you’ve been looking for. But your dream of owning a home comes crumbling down when you receive the news that you’ve been denied a home loan. So, what now?

Best travel cards offered by top South African banks

Planning a trip abroad involves a lot of administration. You need to consider travelling arrangements, reasonable accommodation, and a daily itinerary. But have you considered how you’re going to pay your bills once you arrive? Besides considering bank costs, you also need to consider exchange rates.

Best ways to save your money short-term

For many, it seems close to impossible to save when spending on holiday getaways, Christmas gifts, while also trying to ensure there’s money left to survive January. Justmoney takes a look at the best ways you can save during the short term.


Takealot January Big Sale

Price: Available on request
When: Until 31 January 2020
Where: Online

Annique Restore Package Special

Price: From R600
When: Until 31 January 2020
Where: Centurion

Ster-Kinekor Senior Citizens Discount

Price: Available on request
When: Daily
Where: Nationwide