IMPORTANT NOTICE THE REPO RATE CUT AND WHAT IT MEANS FOR YOU

21 Jul 2017

South Africans with debt were afforded some much needed relief as the Reserve Bank governor Lesetja Kganyago confirmed a repo rate cut from 7% to 6.75%. This comes on the back of hefty increases during 2016.

This means that consumers will now be paying 0.25% less on their mortgage loans and vehicle finance with the expected consequential drop in the prime lending rate from 10.5% to 10.25%.

Kganyago advised; “Despite a degree of volatility‚ the rand exchange rate has been relatively resilient in the face of expected monetary policy tightening in some advanced economies‚ as well as domestic political risks and uncertainties. Risks to the inflation outlook still remain.”

“The rand remains vulnerable to increased global risk aversion‚ domestic political shocks‚ and to the possibility of further ratings downgrades.”

While it appears the drop was unexpected it has certainly received a warm welcome in a stagnating economy and will hopefully introduce a welcome boost to property sales.