Ina Opperman
Business Journalist
6 minute read
19 Nov 2021
5:00 pm

Repo rate increase could hurt over-indebted consumers, economy

Ina Opperman

Already struggling consumers can expect to feel the pinch, after the Monetary Policy Committee decided to increase the repo rate.

Image: iStock

Was the repo rate increase a good decision for consumers? Increasing the repo rate by 25 basis points to 3.75% might have been a good decision for the hawks on the Monetary Policy Committee (MPC) of the Reserve Bank (Sarb) who want to keep inflation in check, but economists and consumers agree that it was not a good decision for already over-indebted consumers or the weak South African economy. This week's increase was the result of a split decision, with three of the five members voting for the increase, while the other two wanted the rate to remain unchanged. The...