News

Repo rate hike expected next week – South Africans are concerned

Published

11 months ago

May 22, 2023

The Reserve Bank will hike the repo rate next week, with an announcement scheduled for May 25. According to SABCNews, economists are predicting an increase of approximately 25 to 50 basis points by the central bank. This increase will mark the tenth hike in the rate cycle that began in November 2021, as reported by BusinessTech.

As per Briefly News, the South African rand has experienced a significant decline against the US dollar, reaching a three-year low. The weakening of the local currency occurred two weeks ago when accusations were made by the United States Ambassador to SA, Reuben Brigety, regarding the country’s alleged supply of weapons to Russia.

Also read: Loadshedding fears cause South African rand to hit 3-year low

The anticipated repo rate increase has sparked concerns among many South Africans facing financial hardships. The added strain of load shedding has further exacerbated the challenges citizens face. In response to the expected rate hike, individuals have expressed their opinions. Nare Adam believes that regardless of the extent of the increase, it will not effectively address inflation but instead harm middle-income earners. Ntombiyamawelase Mazibuko expressed a sense of despair, stating that positive news seems elusive in South Africa. Floyd Mahlaule expressed concerns about the impact on the vulnerable, particularly those relying on social relief grants, while Kgwitsimang Mpeyisi highlighted the potential consequences of bonds and mortgages.

In another report, Capitec revealed that South Africans are experiencing a decline in their financial well-being. The bank, which serves over a third of the country’s population, disclosed that its clients became poorer during the recently concluded financial year as incomes failed to keep up with inflation.

The looming repo rate hike and the prevailing economic challenges have raised criticisms directed at the Reserve Bank and the government. Many South Africans are grappling with the increasing strain on their finances, and the data from Capitec reinforces the reality of declining wealth among the population.

Also read: