The South African Reserve Bank Monetary Policy Committee (MPC) has announced that the Repo Rate is going down from 6.25% to 5.25%. The prime interest rate drops from 9.75% to 8.75%. This will offer much needed relief & good news for South Africans in these turbulent times.
The repo rate is the benchmark interest rate at which the Reserve Bank lends money to other banks.
More supportive monetary conditions can improve resilience of households in the near term, but reserve bank governor Kganyago Lesetja emphasizes that monetary policy cannot lift economic growth rate over medium term or lessen fiscal risks. Lower inflation created space for monetary policy to respond to deteriorating economic conditions in line with the world banks.
Governor, Lesetja Kganyago says COVID-19 will retard global and domestic growth for at least the first half of this year.
Prime lending rate is now at 8.75%. This is the rate at which you borrow money from the bank. Decreasing of the rate means consumers will be paying less INTEREST on their debt, credit card, car repayment, bond. For instance, on a R1 million rand bond over 20 years, a consumer will save R648 a month. The repayments will move from R9 485 to R 8 837.