THE SA Reserve Bank (SARB) this week hiked the repo rate by 25 basis points to 3.75%, placing the prime lending rate at 7.25%. The repo rate hike is the first in nearly three years.
Reserve Bank Governor Lesetja Kganyago said South Africa’s economic outlook was bleak with the July unrest, the pandemic and ongoing energy supply constraints likely to have lasting effects on investor confidence and job creation, impeding recovery in labour-intensive sectors hardest hit by the lockdowns.
Reacting to the rate hike chairman of the Seeff Property Group, Samuel Seeff, said the repo rate hike was a shock to the economy, premature and bad news ahead of the festive season.
“The SARB should have waited until next year. We are disappointed at the hawkish stance, especially since inflation has remained flat for the second month. I am of the firm view that the SARB should be taking a more aggressive approach to supporting the economy as central banks have done globally, he said.
BUSINESS REPORT ONLINE