South African Reserve Bank Governor, Lesetja Kganyago announced that the repo rate will remain unchanged at 3.5%.
The repo rate influences how much interest consumers pay on their loans – for example when the repo rate increases, the interest rates also increase.
This is good news for the consumers as this has provided a much-needed relief in terms of the interest repayment toward different loans, since the beginning of the pandemic. Most consumers have been enjoying lower interest rates due to this repo rate. The 3.5% repo rate is at it's lowest now.
Kganyago said the implied policy quarterly rate path estimates an increase of 25 basis points in the fourth quarter of 2021 which will push an increase that can be expected in 2022 and 2023.
“These repo rates reflect a highly accommodative policy stance through the end of the forecast… keeping financial conditions supportive of credit demand as the economy continues to recover."
He also mentioned that the country's domestic economy grew by 4.2% in the first quarter of 2021 and 4.7% in the second quarter of 2021.
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