The National Credit Regulator (NCR) says some consumers could experience financial strain due to the latest interest rate hike.
The Reserve Bank’s Monetary Policy Committee (MPC) on Thursday announced its decision to increase rates by 25 basis points.
This takes the Repo rate to 4% and the banks’ prime lending rate to 7.5%.
The NCR’s Bongani Gwexe says those who cannot cope with the rate hike should engage with their credit providers on the way forward.
“In reality; this will stress some consumers, particularly those who were on the back earlier. But as the NCR, we have been encouraging a lot of consumers – in particular when the interest rates are going down – to pay more or save that difference from the reduction of the interest rates so it can assist you when this time comes. But for those who are unable to pay because any change would affect them negatively, they must not despair and go talk to their credit providers,” says Gwexe.
Video | Indebted consumers to dig deeper into their pockets after interest rate hike:
“Not much of a surprise”
Meanwhile, economists say that the latest interest hike does not come as a surprise and was anticipated on the back of rising inflation in both local and international markets.
Prior to the announcement, Chief Economist at Efficient Group, Dawie Roodt anticipated the Reserve Bank to increase rates to help cushion middle and low-income countries from the impact of rising rates in developed economies.
Video | Director and Chief Economist Dr Azar Jammine reiterates Roodt’s sentiments