SARB leaves interest rates unchanged
The SARB‘s monetary policy committee (MPC) announced today that they’ve decided to leave the repo rate unchanged at 7.5%.
Their decision means that the prime interest rate will remain at 11%.
Most people (including myself) expected a 50 basis point cut. The SARB‘s decision is unexpected, but can be justified.
Even though the latest PPI figures show that inflationary pressures have eased significantly over the last year, the CPI inflation rate for May 2009 was 8.0%. This is well above the reserve bank’s 3% to 6% target band.
Furthermore, Eskom has just been granted a 31.3% tariff hike, which will have a marked affect on inflation.
I think the SARB chose to be a bit more conservative. They’re allowing themselves time to look at what happens in the South African economy over the next month or two.
I’m still expecting a 50 basis point cut to the repo rate, probably in August.
September 11th, 2009 at 06:40 pm
Since my old comment got wiped in the database recovery here it is again and a small update
“Actually now is the perfect time as you can pick up property for a fraction of its price if you know where to get these insider deals. I’m working on the last part (getting the insider deals), bypassing the national credit act legally is the easy part (you can loan a lot more than what you afford to loan without much risk with the only risk being the loss of a property which was never yours to begin with).
”
I’m in a position where I don’t have much to lose which means I’m going to give it a shot anyway, history has shown time and time again that after interest rates hit rock bottom, property prices are soon to skyrocket as people make more debt to live above their standards once again.
Will keep you updated on what happens
Since I got my first property a few months ago, the first one has already increased in value by about R100000, will probably sell it again before the end of the year and use the profit to add a few more to my property portfolio.