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Question of the Day: How do you normally pay for purchases in stores?
50 basis point hike in interest rates
- Thread starter 3g usr
- Start date
McSack
Executive Member
I do not uderstand how increasing the interest rate is going to help this. Our interest rates have no impact on the price of fuel whatsoever. Price of fuel has a direct effect on the price of food.
C'mon Tito !! You can do better than that... use your bloody imagination! The last 3 repo rate increases have had no effect on the CPIX. Surely this must be telling you something by now?
rwenzori
Honorary Master
The more the merrier!
Moederloos
Honorary Master
Not because of the rising costs of transporting said food, obviously.
Moederloos
Honorary Master
Ok, granted you are correct, what difference will the hike make on that?
Moederloos
Honorary Master
How ironic, considering senior officials voted massive increases for themselves, and we have yet to see any of them do anything, let alone there be an increase in what they do.
QUOTED. FOR. TRUTH!!!!
"Worsen the inflation rate"??? And what about the poor souls who're working on the bread-line and are struggling to afford winter uniforms for their kids because transport costs more and so do basic foods?
Moederloos
Honorary Master
Mbweni's comments seem to be trying to garner some support for govts position from the non-strikers.
He fails to understand that we are intelligent, questioning people - not the usual drooling idiots.
He fails to understand that we are intelligent, questioning people - not the usual drooling idiots.
My understanding of Economics is very basic, but is it not a good thing if interest rates go up? I mean for the point of view of the investor? They now have an opportunity to earn a 13% return if they stick their money in the bank? It is less risky than the stock market.
Moederloos
Honorary Master
But its rands then - and the rand is volatile.
Cool, I understand that aspect of economics, but I still say that 13% is still a pretty good return. IMO I would buy a whole lot of banking/financial services shares, they are bound to be making a killing on people that have loans/credit cards to pay back, myself included.
@Sox: At the end of the day the SA consumer is living WAY out of their means. So in order to try and control debt they hike the rates and hope to hell people stop borrowing money. But this hasnt worked, people are still spending like wild fire. Gvt are trying everything (National Credit Act, etc)
Basically they are trying to slow the economy down.
Basically they are trying to slow the economy down.
Geriatrix
Executive Member
I've got a suggestion for stopping debt. Instead of charging interest, banks should start charging body parts.
It would be if the large majority of households were saving - they're not. It's believed that 70% of the population does not save any money. Most homeowners are also paying off bonds and cars, and the higher the interest rate on these debts, the less money there is to save. The problem is that increasing interest rates as a method to curb credit demand and inflation does not work in low income countries such as South Africa.
Here's the part that someone needs to explain to Tito: CPIX excludes mortgages. So why would increasing the service costs of mortgages bring CPIX in line? It makes no economic sense does it?
Or maybe banks should stop offering credit all together? Nope, I would not survive if that was the case.
But I believe if they bring to an end products that "consolidate" your debt, it would help. People need to realise the consequences of too much debt, and be given ways out their mess.
Well thats what the Credit act is sposed to to. It forces money lenders to take more responsibility for what the lend to who. Basically if they see you cant afford to borrow they dont lend. But the lenders answer to this was to extend credit further to current borrowers. Did anyone notice their credit card limit got automatically increased in the past few months, also the proliferation of Junk mail in the post recently. This was a drive to extend more credit before the act came into place. Sneaky lil shiates!!