In Conversation With Dr Dale McKinley - independent political economist
Loading player...
South Africans are watching closely this week as the South African Reserve Bank (SARB) holds its Monetary Policy Committee (MPC) meeting, where it will decide whether to adjust the repo rate, a key tool that determines borrowing costs across the country.
The repo rate currently stands at 7%, which feeds directly into the prime lending rate of around 10.5%, affecting everything from home loans to business financing. Experts suggest a divide on the outcome: some see room for a 25 basis-point cut, arguing that inflation has moderated in recent months and borrowing costs remain high for households and businesses. Others caution that administered prices, particularly from electricity and municipal services, could push inflation higher, meaning the MPC may prefer to hold rates steady to preserve price stability.
The repo rate currently stands at 7%, which feeds directly into the prime lending rate of around 10.5%, affecting everything from home loans to business financing. Experts suggest a divide on the outcome: some see room for a 25 basis-point cut, arguing that inflation has moderated in recent months and borrowing costs remain high for households and businesses. Others caution that administered prices, particularly from electricity and municipal services, could push inflation higher, meaning the MPC may prefer to hold rates steady to preserve price stability.
