SA Interest Rates

On 17 March the SA Reserve Bank Monetary Policy Committee (MPC) increased the repo rate by 25 basis points to 7% due mainly to upside risks to the inflation forecast and the protracted period of the expected breach (the target band is between 3% and 6%).

According to the MPC inflation is now expected to average 6.6% and 6.4% in 2016 and 2017.

The Reserve Bank cut its growth forecast for 2016 to 0.8%.

The graph below shows:

Interest rates have edged higher since 2014.

The prime lending rate in SA was last around 10% in mid-2010.

The repo rate was last in double-digit territory in 2009.

Momentum Repo and Prime Rates

Click on the graph to enlarge

Source: Momentum

For more read the Moneyweb article “Inflation climbs to 7%, highest rate since 2009”