Repo rate remains unchanged
24 January 2017
The transition from a very relaxed holiday period to school or work means that many people tend to feel the financial pinch from their festive spending. The latest repo rate announcement from Reserve Bank Governor, Lesetja Kganyago, suggests that the future may be very bumpy as the rate remains unchanged at 7% and the economy remains unstable. The year has started on a negative note for most South Africans as the fuel hike welcomed many into the New Year and continued increases in 2017 are anticipated by the Automobile Association (AA).
DebtBusters predicts difficult times ahead for many South African consumers as the drought is nowhere close to ending, causing water levels in most dams to drop, making it hard for crop production. This in turn will leave consumers paying more for their basic commodities such as food. A combination of fuel hikes and the drought will leave many with no alternative solutions but to turn to borrowing. This will result in an increase in the number of short loan applications, which usually have high interest rates and fees attached to them, and many over indebted consumers if the situation does not improve.
On the global platform all eyes are on the United States of America where Donald Trump was recently sworn into office. Many South Africans in the export business are uncertain oabout what the future holds based on his proposed policies that will tighten the flow of goods between the U.S.A. and other nations, including South Africa. On the bright side, tourism inSouth Africa is expected to see a boost, due to the proposed tightening of immigration laws into the U.S. A.
South Africans need to watch their spending patterns and make strategic adjustments to their budgets in preparation for the uncertain future.