Repo rate hike ‘not crippling blow’ to consumers - economist
An economist says the latest hike in the repo rate is likely
to hurt those already in debt but not too significantly.
"In terms of the impact on the man on the street. Obviously if you have debt, car loan or a morgage and those rates are linked to prime, then you will be paying a little bit more,” sas economist Graeme Kerner.
The Reserve Bank's Monetary Policy Committee decided to increase the repo rate by 25 basis points to 4%.
It's the second consecutive hike after rates were kept unchanged for the most part of last year.
Kerner says it will be to the advantage of people who are in the habit of saving financially.
READ: Indebted consumers hit by second consecutive rate hike
"It's not the borrowing rate that goes up but it's also the deposit rate and for many retirees and people who depend on extra income this would be a welcome relief."
“So, the long and short of it, it has an impact on people who have debt and that's probably the majority of South Africans but it's not a crippling blow."
