Economy

‘We should not underestimate the pressure that political constraints place on the private sector and South Africa’s economy’

The divided Committee draws a line in the sand, but gradually

At the November meeting of the Monetary Policy Committee (MPC), South Africa’s repo rate was raised by 25 basis points (bps) to 3.75%. The recent dissenting rhetoric coming from MPC members made it clear that this would be a difficult call, but the narrow 3-2 vote has tipped the scales at last.

Looming agriculture profit margin pressures ahead as the rate hike cycle resumes

The South African Reserve Bank (SARB) followed on its previous warnings that it would not hesitate to hike rates if the inflation trajectory carried on the current path to the upside. The SARB raised its repo rate by 0.25% to 3.75% effective from the 19th of November 2021. The bad news is that the SARB’s projections indicate further increases in the next three years to 2024 which is cumulatively 300 basis points.

Rate hike by SARB is a sign that economic recovery is underway

Following the South African Reserve Bank’s (SARB’s) decision to increase its repo rate by 0.25%, FNB will also lift its prime lending rate by 0.25%. The new rate will take effect on all prime-linked accounts from Friday 19 November 2021.