As we had all thought, the Reserve Bank have raised interest rates again by another 50 basis points which means that the prime lending rate in South Africa is now 14%.
This is the highest the rate has been since September 2003. Prior to this announcement a few hours ago, many economists across the country thought that the Reserve Bank would not change the interest rates but I guess they were all wrong and are now in shock as most South Africans will be today.
The simple fact is, If you previously could not live by your means i.e. afford to pay for your mortgage and car re-payments comfortably then this rate increase is going to hit you hard. And I tend to suspect that there are a lot of South Africans today who could actually be thinking of ‘hanging’ themselves as they are going to struggle to pay off their debt. One interesting thing is that, the government and the Central bank want people in South Africa to get rid of their debt but then how can they achieve that if the interest rates keep on going up?
Share with us your thoughts please.
