Personally, I’m done spending any money in SA, besides what I eat and drink.I’ve read everyone’s comments and voted for 90% of them, there is a common trend here:Everyone is extremely concerned about that the economy is not only uninvestable but also that they only thing growing here is inflation on basic products which has and will continue to deteriorate the consumer purchase power.In a purchase power parity compared to the US, South Africans have lost about 12.5% purchase power since 2017. And what a difference three weeks makes in these turbulent times. My concern is that no reserve bank is really insulated against the catastrophic acts of socialist governments. I am sure he must be aware that his job and his office are not safe.Not due to his performance which has been exemplary under the conditions – but due to the catastrophic and ongoing mistakes being made at Luthuli house.
Oil prices are depressed, but further rand weakness could stoke inflation. When things get really bad, they will bulldoze their way through first the GEPF and then his office will be next …I could not agree more. The move comes as a surprise but is hardly shocking given the extended lockdown to contain the Covid-19 pandemic and the mounting toll it, and unfolding global events, are taking on South Africa’s economy. Will it not just take those, who cannot afford it, more into debt and by doing this, enforces the debt trap? It brings the prime lending rate for consumers to 7.75% and follows a 100 basis point cut at the bank’s March MPC meeting. The compilation of accurate economic statistics will also remain severely challenged,” Kganyago said in his MPC address.“Our second quarter estimate for output has been revised lower. Click here to see other benefits and to sign-up to our reader community supporting quality, independent journalism. South African Reserve Bank (Sarb) governor, Lesetja Kganyago, announced another 25-basis points repo rate cut on Thursday, taking the rate to a four-decade record low of 3.5% and the prime commercial lending rate to 7%.The widely expected decision was made following the bank’s 3-day Monetary Policy Committee (MPC) meeting in Pretoria.The latest cut means that the repo rate has been slashed by 300 basis points or 3 percentage points this year, as the bank takes unprecedented monetary policy steps to help mitigate the economic fallout of the Covid-19 pandemic.The Monetary Policy Committee has cut the repurchase rate by 25 basis points, bringing it to 3.50% per annum, with effect from 24 July 2020. In April, amid the initial Covid-19 “hard lockdown” to curb the pandemic, Sarb called an emergency MPC meeting and slashed the repo rate by 100 basis points. The only ones who should feel glad are those with a shitload of debt.Since everything is going south I suppose this is fitting (excluding debt).Look at retail sales for the last quarter and tell me 25 basis points will make a difference. Rates cuts incentivizes debt and spending. ?African – it means the machine is overheating, in dire need of an overall and running the very likely risk to eventually cease-up.Savers are never punished, they always get what they put in, maybe a little more. Yields have diminished by 50% . It won’t rescue the economy. Image: Moneyweb The rand on Tuesday had lost more than 1% to the Euro to climb to over 20/Euro, while it was fetching around 18.27 to the dollar, according to data on sharenet.co.za.
Don’t want to waste energetic on a eff drol.Well Boombang, you are effectively paying for my retirement.
Ask what prime is; same result.You must save for your retirement, don’t expect my debts to fund your retirement with interest charged. The Bank currently expects GDP in 2020 to contract by 7.3%, compared to the 7.0% contraction forecast in May,” he said.“Even as the lockdown is relaxed in coming months, for the year as a whole, investment, exports and imports are expected to decline sharply. This a very generalised look at things unfortunately the the stats point to a top heavy elite class with insuffienct support from the groups below, this is indicated by the average spending of citizens which is R75,570 a month this is the same figure which they use when Stats SA release inflationary stats. At its last meeting in May, it cut the rate by a further 50 basis points.“The Covid-19 outbreak has major health, social and economic impacts, presenting challenges in forecasting domestic and global economic activity. An unprecedented crisis calls for unprecedented action and competent hands on the tiller. Turns out they include markets in those calculations.
SA Reserve Bank governor Lesetja Kganyago. SA Reserve Bank governor Lesetja Kganyago.
When the economy deteriorates beyond a certain point, the Reserve Bank loses its independence. It punished savers and rewards irresponsible spenders.If I remember Economics 101 correctly (usually minimum 5 points for the definition) – “Economics is the science of studying that part of the human behaviour regarding the macro inter-related effects of production, management and provision or allocation of the limited resources to address the unlimited needs, wants and consumption requirements for goods and services within an economic system.”What’s wrong with the machine when in some parts of the world inter-bank rates are negative.
The previous low was 5% in 2013.History is being made on other fronts as well.