Sarb increases repo rate by 25 basis points - what it means

Cape Town -  The South African Reserve Bank’s (Sarb) Monetary Policy Committee (MPC) hiked the repo rate by 25 basis points to 6% per annum, effective from 24 July 2015, its governor Lesetja Kganyago announced on Thursday.

Banks will raise their prime lending and variable mortgage interest rates by the same magnitude to 9,5% per annum, according to Jacques du Toit, a senior economist at Absa.

AS IT HAPPENED: How repo rate increase will affect you

"The Reserve Bank remains concerned about the outlook for economic growth that is constrained by severe electricity shortages, low levels of consumer and business confidence, inflationary pressures and the possibility of rising interest rates in the United States," he said.

"The forecast is for interest rates to be hiked again later in the year and through the course of 2016 in an attempt to contain inflation," said Du Toit.

"Consumers with debt will thus be affected by rising debt repayments as a result of the higher interest rates, which will further add to their financial strain.

"Banks will continue to monitor economic and consumer-related trends in decisions regarding risk appetite and lending criteria, which will affect the accessibility and cost of credit," he said.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
16.53
-1.1%
Rand - Pound
19.76
+0.1%
Rand - Euro
16.97
+0.4%
Rand - Aus dollar
11.24
-0.1%
Rand - Yen
0.12
-0.9%
Gold
1,766.21
-2.4%
Silver
19.24
-3.7%
Palladium
1,936.57
+0.1%
Platinum
868.51
-2.1%
Brent Crude
113.50
+1.7%
Top 40
58,953
-3.3%
All Share
65,006
-3.1%
Resource 10
59,416
-7.1%
Industrial 25
80,333
-1.1%
Financial 15
14,357
-3.3%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot