SARB’s Monetary Policy Committee (MPC) Raises the Repo Rate
Lee Naik, CEO at TransUnion Africa comments on the latest repo rate hike in South Africa:
"The latest repo rate hike - double what most economists expected - will have a significant impact on the average consumer's wallet, coming on top of a 325-basis point increase throughout 2022. TransUnion's Q4 2022 Consumer Pulse Study found that two out of three consumers (67%) have already cut back on discretionary spending in the past three months, and the latest increase in borrowing costs will further erode their disposable income and their ability to pay their bills. Consumers with vehicle asset finance and home loans will be particularly hard hit, as these large repayments continue to grow.
Consumer debt levels are already on the rise, with South Africans seeking greater access to liquidity to finance the rapidly rising cost of living. But while higher interest rates often signal an increase in distressed borrowing, TransUnion's Q4 2022 South Africa Industry Insights Report shows that consumers are becoming more cautious, with delinquencies improving year-on-year as they prioritise paying off debt faster in the face of rising borrowing costs."