Latest repo rate announcement and what it means for you

On Wednesday, 27 March 2024, The South African Reserve Bank (The SARB)'s Monetary Policy Committee (MPC) rate decision was to keep the repo rate unchanged. According to Governor Lesetja Kganyago,  the decision to hold the repo rate was unanimous. 

Watch the full video below as Governor Lesetja Kganyago addresses the public.

The repo rate has now remained unchanged for 5 consecutive meetings.

While this is good news because it means you do not have to fork out more money to pay for your bond or car loan, it could mean an extended struggle if you are already struggling to keep up with your loan repayments. 

What is a repo rate meaning?

The repo rate is short for the repurchase rate and refers to the rate at which The Reserve Bank lends money to banks in South Africa. 

What is the current repo rate?

 The current repo rate is at 8.25%, with the prime lending rate at 11.75%. 

Does repo rate affect home loan?

Yes, the repo rate has a direct effect on your home loan. This is because it has a direct impact on the prime lending rate. The prime lending rate is the basic rate banks charge on loans. This means that when the repo rate increases, the prime lending rate increases too. When these interest rates increase, your monthly premium increases too. This will affect not only your home loan, but your car loan too.  

What happens when repo rate increases?

As was mention above, when the repo rate increases, the prime lending rate increases and as a result, your home loan's monthly premium as well as your car loan premium increases too.

What causes the change in the repo rate?

The SARB's Monetary Policy Committee (MPC) changes the repo rate so that it can keep the inflation rate under control. As it stands, The SARB is aiming to keep inflation target range between 3%-6%.

Inflation, very broadly, is the increase of the price of goods and services. If you combine an increase in inflation, an increase with interest rates, an increase of the cost of electricity as well as stagnant salaries, it's no wonder that South Africans are struggling to make ends meet.

Did you know: middle-class South Africans are spending nearly 80% of their salary towards financing debt. 

What can you do if you can't manage with your loan repayments and the increase of cost of living?

Go under debt review, also known as debt counselling, at Meerkat. Debt counselling helps South Africans get on top of their debt repayments again. This is accomplished by consolidating all your debt into one, usually reduced monthly repayment.

Did you know: clients at Meerkat can save up to 50% on their monthly debt repayment!

We do this by negotiating with your creditors to reduce the interest rate on your loans. Want to know more about the debt counselling process? Read this blog post. 

Fuel prices are set to increase this week

While the repo rate may remain unchanged, the price of fuel is set to increase on Wednesday, 3 April 2024. According to the Department of Mineral Resources and Energy, motorists can expect a fuel price increase of 65 cents per litre for 93 unleaded petrol (inland) and 95 unleaded (inland) will increase by 67 cents per litre. Coastal increases for petrol 93 will be 58 cents per litre, with petrol 95 increasing by 60 cents per litre.

Find the full list of fuel increases in this article by BusinessTech here.

Who is Meerkat?

Meerkat is a registered financial services provider committed to empowering South Africans do MORE with their money. They do this by helping people:

• Get out of debt.
• Get affordable funeral cover that really covers the cost of funerals in South Africa. 
• Get credit life cover for when the unexpected happens.
• Build an emergency savings fund to ensure you stay out of debt!