Tag: Monetary Policy Committee (MPC)

The repo rate, inflation and the Reserve Bank’s decisions all play a role in shaping our finances, from savings and loans to monthly payments. Understanding how these factors influence our financial well-being can help us make informed decisions and prepare for economic changes.

South Africans should be terrified by the continued discussion of the possible nationalisation of the South African Reserve Bank (SARB). While the Economic Freedom Fighters (EFF) welcome the discussion, and support putting the institution under total control of government, rational individuals should be supporting more independence and autonomy for the SARB, not less.

While many factors indicated the possibility of a rate hike, the South African Reserve Bank (SARB)’s decision to hold their key lending rate provides some relief after a challenging year.

As capital markets grapple with profound shifts in the macro-economic and geo-political landscapes, for investors, 2022 is turning into a year we’d rather forget. Following relative calm over the South African winter, volatility in bond, equity and currency markets recently returned with a vengeance.

As interest rates continue to rise, it is more important than ever to put down a deposit on your new home to keep your monthly bond repayments down. Inflation in South Africa rose to 5.9% in April 2022 and by the end of May, the Reserve Bank’s Monetary Policy Committee increased the repo rate by 100 base points to 4.75%.

Chief Economists from in a variety of countries globally released the Global Economic Outlook paper this week which provides detailed insights into the global obstacles and opportunities. Surprisingly, while the pandemic may not be over, the major economies are shifting their mindset and focusing increasingly on the potential risks and rewards of a more sustainable long-term recovery and route to sustainable growth.

Despite perceiving the overall risks to CPI as on the upside, all five members of the Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 3.5%. The repo rate has been on this level since 23 July 2020.

All five members of the Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 3,5%. It has been on this level since 23 July 2020. The MPC viewed the overall risks to the Consumer Price Index (CPI) outlook to be on the upside compared to balanced in the March 2021 statement. This means the MPC’s interest rate outlook is more hawkish.

The South African Reserve Bank recently announced that it is holding the repo rate steady - but what does this actually mean for property owners, and why should prospective buyers care if the repo rate falls or increases?

The Monetary Policy Committee (MPC) decided to leave the repo rate unchanged at 3.5%. Three members of the committee preferred to leave rates unchanged, while two members preferred a 25 basis point reduction to the repo rate. This serves as a guide to the expectation that rates are more likely to decline than increase under current economic conditions.