Latest news with #SouthAfricanReserveBank
IOL News
9 hours ago
- Business
- IOL News
SA Reserve Bank cuts interest rates: What it means for consumers
South African Reserve Bank Governor Lesetja Kganyago. Image: Thobile Mathonsi / Independent media. South African consumers cheered as the South African Reserve Bank (Sarb) cut the interest rate this past week, however, a wider view shows that the relief could be undone by other costs increasing. Sarb Governor Governor Lesetja Kganyago decreased the repurchase rate for the country by 25 basis points (BPS), dropping the repo rate from 7.50% to 7.25%, effectively taking the prime lending rate to the country to 10.75%, from 11%. Hayley Parry, Money Coach and Facilitator at 1Life's Truth About Money told Business Report that the cut could not have come at a better time. Parry said, "What that means is that, for anyone paying back any debt, it means that you are going to be able to save on your debt repayment. For example, for every million Rand you have in a home loan for instance you are now going to be paying R515 less per month at this new interest rate, thanks to the reduction in the interest rate." "It could not come at a better time because there has been a lot of pressure on South African consumers, with increasing electricity prices kicking in. This is great news for anyone who has been feeling the pinch and been struggling to make ends meet. Hopefully, this is going to provide a little bit of breathing room. If you happen to have any money leftover thanks to this reduction in the interest rate, my advice as always is to make sure you put aside extra cash into your emergency fund because you never know when that may come in handy," Parry added. Tando Ngibe, a senior manager at Budget Insurance said, 'This move offers some relief to consumers, particularly those managing debt, as it slightly reduces the cost of borrowing on home loans, personal loans, and credit facilities. This modest cut should be seen as a chance to reinforce, not relax, responsible financial habits. We urge consumers to use any savings from lower repayments to prioritise essential expenses, reduce high-interest debt, and build emergency funds. While the rate cut may support economic activity, it's important to remain cautious. Inflation risks still persist, and returns on savings may decline. Consumers should continue to budget carefully in order to remain financially resilient in these uncertain times.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Consumers still drowning in debt Meanwhile, Neil Roets, CEO of Debt Rescue gave a more scathing view on the Sarb's rate cuts. Roets said that the announcement of the 25BPS cut, may be good news for economists but will not shield South Africans from the burden of the fuel and sin tax levies introduced by Finance Minister Enoch Godongwana within his Budget 3.0 projection. Roets said, "Increased taxing of the workforce is not the answer, the fuel-tax levy and raising sin taxes even higher, will put further financial strain on households, driving them to new depths of despair. This, at a time when they are buckling under the weight of multiple unsustainable inflation-related living costs. The reality is that the Finance minister's decision to impose new tax measures will hurt lower-income families most, as they will bear a proportionally higher burden, thus forcing them to make impossible lifestyle choices with the little disposable income they have left." "The reality is that the slow pace of the country's repo rate reductions is perpetuating the debt trap that millions of ordinary South Africans find themselves in, leaving millions with no option but to survive on credit. This scenario has been escalating since the prolonged tightening cycle began towards the end of 2021, when the Monetary Policy Committee raised the repo rate by a cumulative 4.75% between November 2021 and May 2023, taking it from 3.50% to 8.25%, the highest level since 2014. Sadly, this means more and more South Africans are relying on their credit and store cards to put food on the table and keep the lights on," Roets further said. "The likelihood is that they will default on debt and fall into an even deeper trap, as the cost of credit rises due to existing debt. This is most evident with big purchases like home and car loans. South Africans need real financial relief. This is a glaring red flag that should be at the top of the list of concerns of the authorities," Roets said.
Eyewitness News
a day ago
- Business
- Eyewitness News
Treasury rules out further drawdowns from GFECRA to boost revenue
CAPE TOWN - The National Treasury has ruled out any further drawdowns from the Gold and Foreign Exchange Contingency Reserve Account (GFECRA) to bolster revenue. In last year's budget, the finance minister announced a R100 million withdrawal from the account to pay off some of its debt. The account, held by the South African Reserve Bank (SARB), is meant to protect the country against foreign exchange fluctuations. There is currently around R390 billion in the account. Twenty-five million rand will be drawn down in each of the next two financial years. Responding to public comments on the budget on Friday, the head of the Treasury's Asset and Liability Management, Ravesh Rajlal, told Parliament's finance committees it was not an option to take out more money. "There is an agreement that we have with the SA Reserve Bank, and what we need to do is that gets updated on a yearly basis, so I think at the time of the medium-term budget policy statement, we will make further announcements in that regard." Rajlal said it was also not preferable to renegotiate the country's debt because it would send a distress signal to the markets. "So, it's important to highlight that we don't go into a renegotiation of our debt, because that will result in a significant impact on our debt stock. What will happen then, obviously, is the ratings agencies will downgrade us and obviously that will have serious repercussions for our borrowing programme."
The Citizen
a day ago
- Business
- The Citizen
Rising scam alert: Fake FICA notices and extortion tactics target bank customers
There has been a significant rise in extortion, email, and text scams (phishing) targeting banking customers in recent months. Standard Bank's Head of Fraud Risk Management, Adv. Athaly Khan, warns against the growing sophistication of these schemes, with fraudsters continually adapting their tactics to deceive individuals into sharing sensitive information. In some cases, victims are even coerced into transferring money into the fraudsters' accounts. Standard Bank offered these general tips to avoid falling victim to fraudsters: Verify authenticity: Always verify the authenticity of any app or communication claiming to be from a financial institution. Always verify the authenticity of any app or communication claiming to be from a financial institution. Do not share confidential information: Never share credentials such as PINs, passwords and one-time passwords (OTPs) with any third-party. Never share credentials such as PINs, passwords and one-time passwords (OTPs) with any third-party. Report suspicious activity: If you encounter any suspicious activity or believe you have been targeted by a scam, report it immediately to your financial institution and the relevant authorities. If you encounter any suspicious activity or believe you have been targeted by a scam, report it immediately to your financial institution and the relevant authorities. Use strong passwords: Ensure that you use strong and unique passwords for your online or digital banking platforms. Ensure that you use strong and unique passwords for your online or digital banking platforms. Enable two-factor authentication: Where possible, enable two-factor authentication for an added layer of security. Here are common tactics used by scammers in recent months and ways to protect yourself: Fake non-compliance notifications Fraudsters are exploiting the bank's need for compliance with the Financial Intelligence Centre Act (FICA). They are purporting to be the bank, sending customer's emails and SMSs, claiming that their accounts are not FICA compliant. 'Their emails and SMSs include malicious links, urging customers to click on or risk their account being blocked or closed,' Khan explained. 'Upon clicking on the link, customers may be routed to a fake login site or prompted to capture sensitive information such as their card number, expiry date, customer verification value (CVV), or One-Time-Pin (OTP). In some instances, the link may cause disruption on the customer's device, giving the fraudsters remote access and total control.' Extortion Scams Extortion scams often involve threats to harm individuals, expose sensitive personal information about them or tarnish their reputations unless a ransom is paid. 'We're increasingly seeing fraudsters impersonate respected bodies such as the South African Reserve Bank (SARB), SARS or the SAPS,' Khan explained. 'They claim to be investigating customers for serious offences, anything from fraud to money-laundering. In some schemes, victims are given a fake account number and instructed to transfer all their funds for the duration of the investigation. In others, the criminals allege they possess compromising material such as private photographs, financial records or other personal details, and demand payment in exchange for keeping it confidential.' Khan further said that these fraudsters go to extreme lengths to convince the targeted individual that they are from legitimate authorities. This includes telephone calls, emails, documents and they sometimes suggest physical meetings. 'The internet has become a prime hunting ground for fraudsters. Customers need to be wary of information they share on social media platforms as cybercriminals are becoming increasingly sophisticated in their orchestration,' Khan added. What to do if you are targeted: Stay calm, do not panic. Fraudsters often use fear to manipulate victims. Take time to verify the legitimacy of the claims. Never send money or click on a link in response to unsolicited messages. Legitimate organisations, including banks, will never ask for payments or sensitive information this way. If you believe your bank account may be compromised, contact your bank's fraud department right away. They can help you secure your account and investigate the issue. Regularly review your bank and credit card statements and report any suspicious activity. Read original story on At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
IOL News
a day ago
- Business
- IOL News
South African Reserve Bank cuts repo rate to support struggling workers
In a positive move for South African workers grappling with rising debt levels, the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) this week announced a reduction in the repo rate by 25 basis points, lowering it to 7.25%. This decision comes as a welcome relief for many households facing financial difficulties and aims to stimulate broader economic recovery. Governor Lesetja Kganyago revealed that the decision is accompanied by a more favourable outlook for consumer price inflation (CPI). This raises the possibility of an additional reduction of 25 basis points later this year, provided that both global and domestic economic conditions remain conducive to a low CPI.
Business Recorder
2 days ago
- Business
- Business Recorder
South African rand falls back after strong gains
JOHANNESBURG: The South African rand retreated on Friday following strong recent gains, but analysts said the outlook for the currency remained positive. The rand traded at 17.94 against the dollar at 1340 GMT, about 0.7% weaker than Thursday's closing level. The currency was hurt by dollar strength, as well as investor uncertainty over U.S. President Donald Trump's tariff war. 'Local factors remain positive for the rand, but concerns over the U.S. fiscal debt, tariff uncertainty, and trade war fears are likely to see some consolidation between 17.70 and 18.00 (to the dollar) in the short term,' Andre Cilliers, currency strategist at TreasuryONE, said in a research note. The rand advanced on Thursday, buttressed by the central bank stressing its strong preference for a lower inflation target at a monetary policy announcement. The South African Reserve Bank (SARB) presented detailed modelling of the impact of a 3% inflation target, compared to the 4.5% level it aims for at the midpoint of its current 3% to 6% target range. The SARB, which resumed interest rate cuts on Thursday after a pause in March, added that its Monetary Policy Committee felt a 3% target was 'more attractive' and said it would continue to consider scenarios based on that target at future rate meetings. 'Investors focused on the implications of a lower target, namely lower inflation, reduced interest rates, bond market inflows, and stronger long-term growth, which further support the rand,' ETM Analytics said. On the Johannesburg Stock Exchange, the Top-40 index last traded down 0.7%. The benchmark 2035 government bond was marginally stronger, as the yield fell 1.5 basis points to 10.155%.
