Interest Rate Increases by Another 25 Basis Points

Interest rate increases by another 25 basis points

Interest Rate Increases by Another 25 Basis Points

On the 27th of January 2023, the South African Reserve Bank (SARB) announced its first repo rate increase for the New Year, from 7% to 7.25%. Those who were hoping for a resolution to the turbulent repurchase rate increases of last year have to face the reality that 2023 is forecast to bring with it more increases. This puts even more financial strain on homeowners, and only worsens the financial troubles facing indebted consumers.

Many consumers are still recovering from festive season expenses, while coming to terms with price hikes in everything from electricity and petrol to groceries and everyday necessities. The last few years have shown that more and more debt is being incurred to simply afford the basics, instead of to splurge on luxuries. As inflation remains well out of its target range, our economy is in dire straits, impacting the affordability of those with tight budgets and debt repayments. It is possible that some people are in over their heads with financial obligations that are now too expensive to afford, as the repo rate increases cause debt repayments to rise as well.

At Debtco Group, we are stepping in to remind consumers that there is hope. We offer effective debt relief to over-indebted South Africans, through Debt Counselling. Professional financial care is our promise, so that you can refocus your energy on what truly matters.

Economists have pointed out that this is the 9th increase to the interest rate since November 2021, when the lending rate was a much more reasonable 3.5%. This is an increase of more than 100% in little over a year. Most consumers have had to readjust their budgets so that their salaries can stretch further, which means cutting out extra spending wherever possible. For consumers with high amounts of debt to repay, these increases are the most apparent, and the best approach is to repay their debt more quickly, or get rid of their debt altogether if possible.

All this financial instability has led many consumers to asking when these increases will stop, and unfortunately, there is no definite answer. It all depends on the rising price of consumer goods, and how successfully global and international inflation can stabilise. Now is the time to take control of your financial situation, and debt.

While we can’t know for sure, the next interest rate increase is suspected to take place in March 2023, probably by another 25 basis points. At Debtco Group, we offer tailored debt solutions to struggling consumers, in the form of Debt Counselling. Our Debt Counsellors are available to guide you on your quest to overcoming debt and finding balance in your finances. Contact us today for assistance!

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