So there's alot of talk and speculation again about another interest rate drop....
24 out of 26 economists in a Reuters poll last week predicted that the MPC, which has seven members, will lower the Bank’s key repo rate by half a percentage point to 7%. That would bring the cumulative reduction over the past seven months to five percentage points, taking prime lending rates back to the level they were at in 2003.
Electricity utility Eskom is asking for a 34% tariff annual increase.
So while producer inflation has braked sharply, consumer prices remain high and central bank governor Tito Mboweni warned after last month's meeting the policy committee was unlikely to go for more big cuts.
Powerful trade unions, close allies of the ANC, have demanded more action from the Reserve Bank and government to save jobs and propel the economy out of recession.
For additional articles relating to the potential rate cut:
http://www.businessday.co.za/articles/Content.aspx?id=73758
http://www.fin24.com/articles/default/display_article.aspx?ArticleId=1518-25_2531251
http://www.moneyweb.co.za/mw/view/mw/en/page87?oid=298839&sn=Detail
4 comments:
I think the rate drop will bolster buyer confidence and that together with Loan to values being where they are should give a great spike in the arm to the man on the street. If you look at the world economic picture it has been the effort of reducing rates, controlling loan to values and curbing wild lending that has sustained and managed the market and those who can afford to buy should buy, not those that cannot. Chris
I agreed with Anonymous when said :"If you look at the world economic picture it has been the effort of reducing rates, controlling loan to values and curbing wild lending that has sustained and managed the market and those who can afford to buy should buy, not those that cannot".
Interesting Article!
Loan advice
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