Repo rate cut may see consumers paying less on outstanding debt - economist

South African Reserve Bank (Sarb) Governor Lesetja Kganyago announced on Thursday that the repo rate would be cut by 25 basis points to 6.75%.

The repo rate is the interest rate at which the Sarb lends money to commercial banks.

The Monetary Policy Committee has decided to cut the interest rates, with effect from 21 July 2017.

Economist Mamello Matikinca says consumers may pay less on outstanding debt or big purchase items, as a result.

She explains that banks had not anticipated the surprise cut.

I think that the timing was a bit surprising on our side. We had anticipated that the governor dovish statement to prepare the market for the cut.

Mamello Matikinca, Economist at FNB

According to Matikinca, the Reserve Bank has made it clear that they are less worried about inflation than earlier this year.

She explains how SARB downwardly revised the inflation forecast from May.

Below are the inflation forecast changes:

  • 2017: consumer inflation will average 5.3% (from 5.7% forecast in May )
  • 2018: 4.9% (from 5.1% forecast in May)
  • 2019: 5.2% (from 5.3% forecast in May)

At the same time, Matikinca says 25 basis won't have a huge impact on structural issues such as unemployment and will not impact economic growth or business confidence.

Take a listen to her explain:


CapeTalk welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

  • Racism (including offensive comments based on ethnicity and nationality)
  • Sexism
  • Homophobia
  • Religious intolerance
  • Cyber bullying
  • Hate speech
  • Derogatory language
  • Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the CapeTalk community a safe and welcoming space for all.

CapeTalk reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

CapeTalk is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

Read More
'Vote-buying claims first surfaced at Polokwane 2007 with battle for president'

'Vote-buying claims first surfaced at Polokwane 2007 with battle for president'

Ranjeni Munusamy says Polokwane was the first conference where there was real contestation over the ANC presidency.

Expect an 8% hike in university fees come 2018

Expect an 8% hike in university fees come 2018

Universities South Africa’s CEO Ahmed Bawa says that they are caught in between a rock and a hard place with the hike.

[WATCH] Bongani Bingwa compares the President to a toddler

[WATCH] Bongani Bingwa compares the President to a toddler

Bongani played a sound clip highlighting a toddler having a meltdown and says, like toddlers, the President doesn’t want to share.

The Sarb may not want to trim rates prematurely - economist

The Sarb may not want to trim rates prematurely - economist

The South African Reserve Bank will announce on Thursday if it will trim or keep interest rates unchanged.

5 reasons interest rates will not come down (yet)

5 reasons interest rates will not come down (yet)

The Money Show’s Bruce Whitfield interviews FNB Economist Mamello Matinkica.

'Middle class will pay more due to repo rate changes'

'Middle class will pay more due to repo rate changes'

According to economist Lumkile Mondi, the middle class will be the hardest hit by the interest rate hikes.

Popular articles
'This puts pressure on Jacob Zuma to vacate office earlier'

'This puts pressure on Jacob Zuma to vacate office earlier'

The Money Show’s Bruce Whitfield interviews Daniel Silke, Political Economy Analyst at Political Futures Consultancy.

Judge Mlambo: Zuma's application amounts to abuse of judicial process

Judge Mlambo: Zuma's application amounts to abuse of judicial process

EWN Barry Bateman explains the High Court proceeding on President Zuma's application to set aside parts of Madonsela's report.

It's chicken for Joburgers and Durbanites, but what do Capetonians feast on?

It's chicken for Joburgers and Durbanites, but what do Capetonians feast on?

Stephen Grootes spoke to founder and CEO of OrderIn to find out more about South African's eating habits.

Predictably awesome new Nando's ad reminds South Africans ‘we can fix our sh$t’

Predictably awesome new Nando's ad reminds South Africans ‘we can fix our sh$t’

Watch the Guptas pack their bags and run in Nando's inspiring new advertisement.

PSG Chair Jannie Mouton opens up (kind of) about Steinhoff

PSG Chair Jannie Mouton opens up (kind of) about Steinhoff

In 2012 Steinhoff acquired 20% of wealth manager PSG, reportedly infuriating Mouton. Bruce Whitfield interviews him.

[LISTEN] Caller challenges Eusebius on land disposition

[LISTEN] Caller challenges Eusebius on land disposition

‘I need you to provide me with an answer' - John from Edenvale, Gauteng