The Reserve Bank has just cut the REPO rate from 6,5% to 6,25% meaning that prime now falls to 9,75%. The reasoning being that with a struggling economy it would be advantageous to reduce the rate in order to assist consumers who are already battling to pay bills.
The bank now estimates that SA GDP will only expand by 0.4% in 2019. GDP outlooks for 2020 and 2021 were also downgraded to 1.2% and 1.6%.
This will mean that all bondholders will see a reduction in their installments as of next month. Welcome news.