Anyone betting on an interest rate decrease

[Dave A]

Looks like folk are starting to think we might get an interest rate decrease one day soon.

Not sure it's good news, though. Signs of tough times...

[Nickolai Naydenov]

It would be nice, I just don't see it happening

[AndyD]

I think it's a fifty/fifty at the moment. They could easily justify a decision either way. It might be worth an outside bet on a small decrease if you're offering decent odds Dave

[Blurock]

For now, it may just remain static.

[Blurock]

Dave was right. Repo rate reduced by 0.5% .

[AndyD]

It's a sign of the times. Not even 5 years ago the decision to adjust interest rats was based almost purely on inflation.

[IanF]

Isn't SA catching up with the rest of the world just look at the rates in the USA and Japan.

[Blurock]

...or is it an attempt to stimulate the economy?

[Dave A]

...or is it an attempt to stimulate the economy?

That, and to try help folk who are struggling with their debt, I think.

[murdock]

i am not complaining...my bond has come down R4000 since i got it a couple of years ago...i have no investments so i am smiling...all my money is invested in my small bussinesses...bummer if you are a pensioner or living off your interest earned from investments.

i wonder how these interest rate adjustmetns are affecting people life policies...and long terms savings...i am sure you gona find out when it comes to payout time.

i have to laugh at how the fuel price...exchange rate etc always affects the price of goods in a negative way...but whenever there are reductions...you never see a reduction in prices.

[Nickolai Naydenov]

...or is it an attempt to stimulate the economy?

The sarb controls the moneytary policy and a part of it is inflation targeting to be between 3-6%. When the economy slows down they try to stimulate it by cutting rates so people can take on more credit and increase inflation by increasing demand, if they don't do that and we start to get negative growth we will enter ressesion after two concequitive negative quarters which means cutting jobs and etc
However that doesn't always work as Ian poined out, Japan have been in deflation for more than 20 years now and cutting rates to almost zero didn't help, I don't believe this will happen soon in SA, in developing economies it's easier to correct at least for now. The US are creating bigger and bigger bubble by printing more money, increasing their debt ceiling when their gdp is nowhere near their expenditure. Unfortunately the whole world is indebted and countries will carry on falling because of the whole system that is place, besides money is not backed by anything, inflation, interest and so on are money that don't exist, if they take all the money in the world there would still be debt because of the whole system so everything will fail with time, we going to move to moneyless system, we'll have microchips that will literally control us, this is coming and our children will suffer that while a few people will rule the world, it's a scary thought

[Blurock]

I doubt if this reduction in rates will stimulate the economy. What will stimulate the economy is when banks start giving loans for bonds and businesses and consumers start buying again.

In view of looming food inflation, rising energy prices (electricity and fuel) and increased add-on taxes for every little thing, I can not see people adding more debt to their existing burdens.

Now is a good time to pay off your debt while rates are low. Sadly our elderly pensioners who rely on investment income will be hardest hit.

[Nickolai Naydenov]

I doubt if this reduction in rates will stimulate the economy. What will stimulate the economy is when banks start giving loans for bonds and businesses and consumers start buying again.

In view of looming food inflation, rising energy prices (electricity and fuel) and increased add-on taxes for every little thing, I can not see people adding more debt to their existing burdens.


Now is a good time to pay off your debt while rates are low. Sadly our elderly pensioners who rely on investment income will be hardest hit.

The banks will give credit because its cheaper to afford
Pensioners will be hit because their retirement savings are kept mostly in cash, if they have someone looking after them in terms of investment advice then things are different