Interest rate straitjacket: SA’s economy chokes under borrowing costs

Sizwe Dlamini

AS South Africa grapples with the aftershocks of recent interest rate decisions, the repercussions for everyday consumers and businesses are becoming painfully clear. The latest stance of the SA Reserve Bank (Sarb), marked by a rather cautious approach towards monetary policy, is sending ripples through the economy, threatening to disrupt growth at a time when recovery is both crucial and tenuous. With inflation forecast to reach a new low point in 2025, Sarb still maintains a restrictive monetary stance with a terminal interest rate of 7.25%. This decision echoes through the financial corridors of the nation, fuelling a narrative that could lead to a significant slowdown in economic activity. In its latest interest rate meeting, Sarb described its position as a “hawkish hold”, deliberating on the implications of not merely…

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Sunday Independent (Digital) - 1 Issue, 2025-03-23

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