Due to the rise in inflation as a result of the rapid increase in fuel costs, the Monetary Policy Committee (MPC) introduced a defensive 25-basis point hike. This decision will bring the repo rate back up to 7.0% and the prime lending rate to 10.5%.
Out of the 6 MPC members, 4 voted for a hike while 2 voted for no change. The decision was made because it is expected that the inflation rate, which is standing at 4%, is expected to increase to 4.4% during this year which is higher than the March forecast.
Even though this will increase the monthly repayments for homeowners, we are grateful that the prime rate still remains lower than the 11.75% we experienced during 2024.
To read more about the announcement, please refer to the News24 article.
