The South African Reserve Bank has raised interest rates by 25 basis points, taking the repo rate to 7.25% and prime to 10.75%. It is the second increase this year, coming as inflation edged up to 4.4% in August and higher oil prices renewed pressure on the inflation outlook.
Francis Herd explains how that quarter-percentage-point increase travels from the Reserve Bank into household budgets, from higher home-loan repayments to less money left for everyday spending. But the pressure goes wider than debt: with annual economic growth projected at just 1.2%, South Africa is confronting higher borrowing costs while still struggling to shift the economy into a stronger, job-creating gear.
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Chapter List
(00:00) Why the Reserve Bank raised rates by 25 basis points
(01:11) What the rate hike adds to your home loan
(01:50) Inflation rises as global risks build
(03:16) Why fuel prices could add more pressure
(04:33) Can 1.2% growth create enough jobs?
