According to Bloomberg, the US Federal Reserve may also raise interest rates by 75 basis points toward the end of July as officials turn to more aggressive measures to battle inflation. This scenario comes after the annualised US inflation rate was announced to have accelerated to 9.1% in June.

In general, SA property professionals were not surprised by the MPC’s decision to increase the repo rate. However, some had hopes of a more minor increase.

Realistically, the lows that we had mid-pandemic were never going to be sustainable in the long term. Unfortunately, factors like international conflict, increasing global economic pressures and our own ongoing energy crisis have forced that slow and steady rise to take a steeper trajectory than we had hoped for.



Industry comment

FNB chief executive Jacques Celliers says that interest rates are rising rapidly around the world as central banks take steps to reign-in inflation and restore price stability.

To place the rate hike in perspective, the new prime rate remains below the pre-pandemic levels of January 2020. This means the SARB’s monetary policy remains in line with longer-term trends if we look beyond the extreme measures taken during 2020. However, consumers and borrowers should be aware that further rate hikes by the central bank are a possibility in the coming months. We also expect upward consumer price pressures to remain in place for several months.

Courtesy of Private Property & Sarah-Jane Meyer



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