Interest rates unchanged after MPC meeting
http://www.realestateweb.co.za/realestateweb/view/realestateweb/en/page228?oid=62772&sn=Detail
After a two-day meeting, the South African Reserve Bank’s Monetary Policy Committee (MPC) left the key monetary policy interest rate – the repo rate – unchanged at 6,5%. As a result, banks’ lending rates to the public, i.e. prime and mortgage rates, are to remain at a level of 10%. Interest rates have been cut by a cumulative 550 basis points since December 2008.
Consumer price inflation is currently below 5% year-on-year (y/y), but factors such as double-digit administered price inflation and wide-spread wage hikes of well above inflation pose some risk to the inflation outlook. No further rate cuts are forecast for the rest of the year, with a rate hike expected by mid-2011 due to inflationary pressures. Mortgage repayments are still about 29% lower compared with late 2008, when the mortgage rate was at a level of 15,5%. However, the household sector remains heavily indebted, with the ratio of household debt to income at 78,4% in the first quarter of 2010, and expected to remain around the 78% level towards the end of the year. The debt ratio is forecast to rise marginally during 2011.
(via Instapaper)
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