
Homeowners were dealt a new blow on Thursday, 30 March when the South African Reserve Bank (SARB) announced its decision to hike the interest rate by a shocking 50 basis points.
While some economists were expecting a 25 basis point increase, the Reserve Bank blamed a number of factors for the increase, including loadshedding.
Against this backdrop, the MPC decided to increase the repurchase rate by 50 basis points to 7.75% per year, with effect from the 31stof March 2023. Three members of the Committee preferred the announced increase. Two members preferred a 25 basis points increase. #MPCMARC2023 pic.twitter.com/LMAKRvH77a
— SA Reserve Bank (@SAReserveBank) March 30, 2023
Lesetja Kganyago, Reserve Bank Governor said inflation pressures remain risky, adding that loadshedding is pushing up the cost of living.
“Economic and financial conditions are expected to remain more volatile for the foreseeable future. In this uncertain environment, monetary policy decisions will continue to be data-dependent and sensitive to the balance of risks to the outlook.
The Eskom energy crisis, weak business confidence, deterioration of CPI inflation to 7% in February (from 6.9% in January), and pressure on the currency left little room to manoeuvre.”
This takes the current prime lending rate from 10.75% to 11.25% and the interest rate from 7.25% to 7.75%.
The outcome for homeowners will mean a R750 000 home loan will now cost an addition R250 a month, from R7 614 to R7 869.
Interest rates are now at the highest in 13 years, with this being the 9th rate hike from November 2021.


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