The time to fix the roof is while the sun is still shining
THE GOVERNOR of the South African Reserve Bank recently announced an increase in the lending rate by 75 basis points. This means that the repo rate (the rate at which the central bank lends money to commercial banks) will increase from 5.5% to 6.25%, and the prime rate (the rate commercial banks charge their clients when lending them money) rises from 9.0% to 9.75%.
South Africa isn’t alone. Countries across the continent—and the world—have also been hiking rates to manage rising prices. South Africa is the most recent African country to hike rates. Others have included Ghana and Nigeria. And more hikes are expected in the coming weeks.
From a personal finance perspective, in-creased interest rates have implications for anyone with a mortgage, vehicle financing, student loan, or any other form of debt. Higher interest rates translate to…