2015 Mar 26 - Interest Rates to Remain Fixed - Good For Buyers
"The MPC has unanimously
decided to keep the repurchase rate unchanged for now," Reserve Bank
Governor Lesetja Kganyago said on Thursday, 26 March 2015.
The repo rate has remained unchanged since a 25 basis points rate hike in July
According to the Bank's latest forecasts, inflation is now expected to average
4.8% in 2015, compared with the previous forecast of 3.8%. It is expected to
average 5.5% in the final quarter of the year, compared with the previous
forecast of 5.3%.
“This could mean that we once
again hit the 6 plus numbers in the first quester of 2016,” said Colin Fibiger,
CEO of Property Network. “Government has lost control over many other issues
affecting our CPI and we can expect them to up the interest rate to counter the
“While this is a concern,”
said Fibiger, “the market remains in favour of buyers and they should make use
of the ongoing opportunities offered to them.”
“The shackles on growth are
slowly being removed and buyers should enter the market before pricing shifts
considerably upwards,” he said, “and interest rates remain favourable and
Fibiger added that the outlook for the economy remains overshadowed by the
electricity supply constraint, lack of long term management of fuel prices, and
government corruption and mismanagement, all which appears to have had an
adverse effect on recent economic activity.
"This constraint is likely to persist for some time, and has resulted in a
downward revision of short-term potential output to between 2 and 2.5%.
Nevertheless, some improvement on the 2014 growth rate of 1.5% is expected in
2015, in the absence of protracted work stoppages," he explained.
The rand exchange rate continues to be the main upside risk to the inflation
outlook, and remains highly vulnerable to the timing and pace of US monetary
Additionally, wage and salary increases in excess of inflation and productivity
growth also pose an upside risk to inflation.
Fibiger concluded saying that the timing of future interest rate increases will
be dependent, as before, on a range of domestic and external factors.
to Main News page
BE A REAL
SHARE THIS WITH SOMEONE