Moments ago, the Monetary Policy Committee of the South African Reserve Bank (‘SARB’) convened its fifth meeting of the year. As widely predicted by major financial institutions and economic analysts, SARB finally elected to lower the repo rate from 8.25% to 8%, with effect from tomorrow, 20th September 2024. Accordingly, the prime lending rate is adjusted to 11.5%. This marks the first time in eight meetings that SARB has altered the repo rate.
The adjustment follows the easing of consumer inflation from 5.1% in June to 4.4% in August, which is below SARB’s mid-point target range of 4.5%. Indeed, analysts estimate that inflation may drop below the 4% threshold in October.
Crucially, the interest rate cut provides a modicum of relief to homeowners whose bond repayments increased significantly after SARB raised the repo rate by a cumulative 3.75% beginning in November 2021. Positively, economists anticipate further cuts in November and early 2025.
For further information or legal assistance, contact us at info@stbb.co.za.