HomeHome SearchSearch MenuMenu Our productsOur products

Banks keep interest rates on hold following the Reserve Bank's decision

by , 27 March 2015

Yesterday, the South African Reserve Bank announced the outcome of its monetary policy committee (MPC) meeting.

The central bank opted to leave its repo rate unchanged. This led major banks to leave their interest rates unchanged too.

Let's take a look at the reasons behind the Reserve Bank's decision…

The repo rate remains at 5.75%

The Reserve Bank announced that it was keeping the repo rate “unchanged at 5.75%,” reports IOL. The last move to the repo rate occurred in July last year, when the bank increased it 0.25%.

This led major lenders, such as Nedbank and Absa, to also leave their interest rates untouched following the announcement, notes Fin24.

The central bank made its decision based on its “concerns about a deterioration in the inflation outlook with those over weak economic growth,” says MoneyWeb.

With the country struggling with power supplies amongst other things, there’s a risk to economic growth, adds MoneyWeb. But with fuel prices starting to climb again and the rand so volatile, the upward pressures on inflation are there.

The governor of the Reserve Bank, Lesetja Kganyago, says the bank is keeping its “growth forecast for the year… at 2.2% for 2015 and 2.3% for 2016,” notes IOL.

What lies ahead for interest rates?

Isaac Matshego, an economist with Nedbank, says they believe the Reserve Bank will hike rates 0.25% in November, reports BDLive. He says this is due to the central bank suggesting a hike could be soon with the language it used. “It’s just a question of when.”

Investec Asset Management’s Nazmeera Moola said that it’s clear the committee is concerned about growth, notes MoneyWeb. But are watching inflation closely. The bank “raised their inflation forecasts for 2015 (from 3.8% average in January to 4.8% now).

So as expected, the Reserve Bank left rates unchanged. But depending on what happens with the rand and inflation, hikes could be nearing.

*********** Best seller *************

Achieve financial independence one income stream at a time

I’m a big believer in financial independence. I don’t want to be dependent on anyone or any institution to take care of my family or me in the future. Having one source of income is very scary to me. If that stream of cash dries up – for whatever reason – I want to know that I have other cash streams I can tap into.

When most people think of extra income they think of athletes and actors who get endorsement and advertising deals.

But the truth is that anyone can create extra income streams. You don’t need well-placed connections. You don’t even need to be especially smart.

All you need is the willingness to invest a little extra time in learning about your options – and then invest a little more time and some money pursuing them.

That’s why I started this publication – Because I want to show you how to create multiple income streams for yourself.


Banks keep interest rates on hold following the Reserve Bank's decision
Rate this article    
Note: 5 of 1 vote

Have a trading or investing question? Click Here

Related articles

Related articles

Watch And Learn

Trending Topics