The Reserve Bank has increased the repurchase rate by 25 basis points (a quarter of a percent) to 7.25% per year, with effect from Thursday.
The bank says as a result of extensive load-shedding and other logistical constraints, it now forecasts GDP growth of only 0.3% for 2023Reserve Bank governor Lesetja Kganyago says forecasts incorporate an assumption of increased load-shedding in each year compared to what was pencilled in in November.You will have to pay more to service your home loans, vehicle installment and credit debts as the Reserve Bank hikes the repurchase rate.
He said while the South African economy grew by a relatively strong 1.6% in the third quarter of 2022, the expansion was not broad-based. “Given the scale of load-shedding, the Bank estimates that it deducts as much as two percentage points from growth in 2023, compared to the previous estimate of 0.6 percentage points.”
Kganyago said the revised repurchase rate remained supportive of credit demand in the near term, while raising rates to levels more consistent with the current view of inflation and risks to it.
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