Rate-hiking cycle coming to an end, says economist
An
economist believes the South African Reserve Bank's rate-hiking cycle is coming
to an end.
Efficient Group economist Dawie Roodt's been commenting on the central bank's decision to push the repo rate up again.
It was increased to 7.25%, lifting the prime lending rate to 10.75%, on Thursday.
"The increase of only 25 basis points in the interest rate means that the Reserve Bank is slightly less concerned about inflation than previously.
READ: Fuel set to be more expensive in February -AA
"Previously, they increased the rate by 50 basis points and the fact they only increased by 25 basis points this time around suggests that we are slowly getting to the end of the interest rate hiking cycle, although I think they are probably going to go for another 25 basis point in two months’ time. But I think the worst is behind us."
Ayanda Nzimande, who is a Business Development Manager at Sanlam, says many people are wondering how they're going to service their debts.
"Considering that Eskom is also increasing their tariffs on the 1st of April, it means the consumer’s disposal income is going to be very thin. This is going to cause a lot of pain for people who are already stuggling with high food prices, record load shedding as well as high fuel costs. For those who have extra cash, consider paying more on debt as well as savings."
