A possible reduction in prime lending rates is expected to be announced by the Reserve Bank tomorrow, and in what is expected to be the first of several decreases, South Africans have a chance to increase savings and strengthen their personal finances, Liberty says.
Indications by economists are that a further cut in the prime lending rate could occur before the end of 2024, further boosting consumers disposable income or ability to save.
Interest rates have peaked for over a year
The prime lending rate was reduced to 7% during the Covid-19 pandemic to assist South Africans facing financial hardship. In November 2021, the rate began to increase, peaked at 11.75%, and has remained at this level since May 2023.
The impact on personal incomes has been severe. But, with inflation easing and falling within the Reserve Banks target range, consumers have an opportunity to use the rebate in the rate wisely instead of resuming spending.
