Results 1 to 6 of 6

Thread: Interest rate shock

  1. #1
    Suspended
    Join Date
    Nov 2007
    Location
    South Africa
    Posts
    180
    Thanks
    10
    Thanked 29 Times in 21 Posts

    Interest rate shock

    Johannesburg - The South African Reserve Bank's (Sarb's) monetary policy committee (MPC) has left the key repo rate unchanged at 7.5%.

    This means that the prime lending rate will remain at 11%.

    The repo rate is the rate at which the central bank lends to other banks, while the prime lending rate is the benchmark rate at which banks lend to customers.

    The announcement came after the consumer price index (CPI) eased to 8.0% in May compared to the same month last year, down from 8.4% in April. Earlier on Thursday, the producer price index (PPI) showed deflation of 3% in May 2009, compared to the same month last year.

    Economists argued that falling inflation - although still above the Reserve Bank's target of 3% to 6% - would have nudged the MPC towards a further rate cut.

    "PPI inflation came out much lower than expected," said Investec economist Annabel Bishop prior to the interest rate announcement. "We continue to believe Sarb will cut interest rates by 50 basis points on Thursday and 50 basis points in August."

  2. #2
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,981
    Thanks
    3,056
    Thanked 2,463 Times in 2,068 Posts
    Blog Entries
    12
    Once again the economists prove they can't read Tito's mind. But was it really a surprise? After all we've had a 200 point drop during May. I reckon a little more improvement in inflation data and maybe another 50 points in August is possible.
    The trouble with opportunity is it normally comes dressed up as work.

  3. #3
    Suspended
    Join Date
    Nov 2007
    Location
    South Africa
    Posts
    180
    Thanks
    10
    Thanked 29 Times in 21 Posts
    Our economy is on life support and I am not sure what will get it going again.
    With regard to credit extension all the banks have slammed the doors shut

  4. #4
    Moderator IanF's Avatar
    Join Date
    Dec 2007
    Location
    Jhb
    Posts
    2,615
    Thanks
    191
    Thanked 520 Times in 398 Posts
    All the economists were calling for a.5% drop, once again Tito has surprised us. So lets see in August, I reckon .5% then.
    Only stress when you can change the outcome!

  5. #5
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,981
    Thanks
    3,056
    Thanked 2,463 Times in 2,068 Posts
    Blog Entries
    12
    Quote Originally Posted by QUINN View Post
    Our economy is on life support and I am not sure what will get it going again.
    There's lots of people scratching their head over that one. I'm not convinced that dirt cheap credit to consumers is the answer, though. After all, isn't that what got us into this mess.
    Last edited by Dave A; 26-Jun-09 at 09:14 PM.
    The trouble with opportunity is it normally comes dressed up as work.

  6. Thank given for this post:

    Graeme (27-Jun-09), Morticia (29-Jun-09)

  7. #6
    Full Member totius54's Avatar
    Join Date
    Jun 2009
    Location
    western cape
    Posts
    42
    Thanks
    0
    Thanked 2 Times in 2 Posts
    Quote Originally Posted by QUINN View Post
    Our economy is on life support and I am not sure what will get it going again.
    With regard to credit extension all the banks have slammed the doors shut
    Life support is putting it mildly . The patient is in rigor mortise . We had +- 11million jobs before the recession hit . we have lost close to 1.5million jobs and a further 500000 by end of December. We are in very bad shape

    This is it

Similar Threads

  1. How would an interest rate increase affect you?
    By I Robot in forum Business Finance Forum
    Replies: 97
    Last Post: 21-Apr-10, 01:31 PM
  2. Prime vs repo interest rate
    By Dave A in forum Business Finance Forum
    Replies: 9
    Last Post: 25-May-09, 01:05 PM
  3. Interest rate drivers
    By Dave A in forum Business Finance Forum
    Replies: 1
    Last Post: 13-Jul-08, 06:08 PM
  4. Surviving higher interest rates
    By Dave A in forum Business Finance Forum
    Replies: 15
    Last Post: 14-Dec-07, 11:17 AM
  5. Call for 2 percent interest rate hike.
    By Dave A in forum Business Finance Forum
    Replies: 0
    Last Post: 03-Oct-06, 10:34 AM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •