Since the historic lows of the first few months of the Covid 19 Pandemic in 2020, the Repo Rate has been steadily increasing over time.
This has resulted on more and more pressure on those who owe money to credit providers whose interest rates are linked to the Repo Rate.
As the Repo Rate climbed so to did the amount the banks and other credit providers required each month from consumers.
Find Out More: What is the Repo Rate?
Currently consumers are stretched to the max and we all dreading any further increases which they simply could not handle.
Several factors are taken into account when the SARB MPC meet and discuss whether to push rates up or bring them down.
Inflation is one aspect with the MPC likely to push rates up if inflation is higher than their target range. Higher rates have been linked in many cases to reigning in inflation (in certain circumstances – which may not currently apply to SA).
The value of the Rand to other currencies which impacts on imports and exports and the prices we pay.
The cost of fuel is also a big factor especially since this is paid for in US Dollars (which then ties back to the Rand Value and impacts on inflation).
There are also some political factors which have increasingly become something the SARB MPC has to be cognizant of.
As a result of reasonable inflation figures and the Rand playing an ok balancing act against some other currencies (though not doing fantastic admittedly) the decision was made to keep the rate stable for the moment.
The decision brings great relief to those who were scared of another hike. Of course, it is not a reduction which would be received with even more excitement but it is a start and may indicate that we have seen the last hike for a while.