Well it was only a matter of time wasn’t it?

South African Reserve Bank (Sarb) governor Lesetja Kganyago announced today a a 50 basis-point increase in the repo rate to 6.75%, which also means that the prime lending rate will now be 10.25%.

So what accounts for this hike? Well you kinda know the answer to that but here’s Fin24:

The deterioration in forecast is mainly due to the exchange rate assumption and expected higher labour costs, he said at the end of the Sarb’s first monetary policy committee (MPC) meeting for the year…

Jacques du Toit, senior economist at Absa, said the MPC’s decision to increase the repo rate again after announcing a rate hike in November was taken against the background of factors such as the sharply weaker rand exchange rate since late last year, anticipated food price increases in the near term because of the impact of the severe drought on agricultural production and the possibility of above-inflation electricity tariff hikes this year.

DebtBusters CEO Ian Wason said consumers need to prepare themselves and find other means to pay their monthly expenses as opposed to taking out loans. DebtBusters’ latest Debtometer Report shows that its clients require 102% of their net income to service their debt before paying for any living expenses.

He said middle- and-upper income earners in particular should watch out for higher living expenses and to factor these into their monthly household budgets.

On the plus side tomorrow is Friday – that’s gotta count for something right?

[source:fin24]