South African consumers will have to hold their breaths for a while longer as interest rates remain unchanged in the country.
This comes after South African Reserve Bank (SARB) Governor Lesetja Kganyago announced yesterday that there would be no change to interest rates in the country following the bank’s monetary policy committee (MPC) meeting.
This means that the repo rate will remain at 8.25%, while the prime lending rate also stays at 11.75%.
Brina Biggs, a senior manager at 1Life Insurance, told “Business Report”: “What this means for consumers is that if you have any debt, it won’t cost you more at the end of the month, but with the first of April looming, post Budget speech, this is when we see the impact of all those additional taxes added onto liquor etc.
“So, we will see an increase in petrol price as well, as currently predicted, which will also be finalised next week, and a decrease for diesel. If that is the case, we should see a knock-on effect positive for food prices etc. a little bit further down the line. So, even though your date won’t cost you more, there will still be additional expenses coming in in April.”
Meanwhile, Hayley Parry, money coach and facilitator at 1Life’s Truth About Money, said: “South African consumers who are desperately wanting the cost of their interest on any form of debt to go down may have to wait a little while longer. Interest rates have remained unchanged since May last year.”
Bradd Bendall, the interim CEO of BetterBond, said: “While it was hoped that the drop in inflation expectations for the next two years would be enough to prompt a cut in interest rates this month, homeowners will have to hold out a bit longer for some financial relief. The Reserve Bank is taking a cautious approach to interest rates at this time, which is not unexpected given that we are in an election period where rand volatility could be a challenge. The next repo rate announcement is in May, a day after the general elections, and we anticipate rate cuts towards the second half of the year.”
Samuel Seeff, the chairperson of the Seeff Property Group, said: “The market remains upbeat that rate cuts are imminent and should come by midyear. The economy is in somewhat of an impasse, and needs a boost, and with that the property market too.”
Seeff said the higher than necessary interest rate was impacting on the market, both in terms of sales volumes and prices.
“There has been a notable decline in sales volumes since the middle of last year and price growth has stalled to just about under 1% which is not a great incentive for sellers. It is still good for buyers though who, despite the higher borrowing costs, can find good deals in the market. The flat price growth means that property prices in many areas are very similar to what they were two years ago, which is quite unheard of and a huge benefit for buyers. At the same time, there are many motivated sellers who are willing to look at serious offers,” Seeff further added.
In a unanimous decision by the MPC, the governor referenced global unemployment rates, the poor performance of the country’s economy in the final quarter of 2023 and load shedding which formed a basis for the decision to keep interest rates unchanged.
BUSINESS REPORT