Mboweni considers 200 Basis Point hike

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kingmonty

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South African Reserve Bank (SARB) governor Tito Mboweni said on Wednesday that the task of the central bank is to maintain inflation in the 3% to 6% target band, and with CPIX inflation now at 10.4% "drastic" measures are required. He said he and his colleagues had discussed the impact on the economy of raising by 200 basis points.
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:eek: :eek: :eek:

That will have a devastating impact on the poor and middle class of this country. I hope everyone here has their credit under control.
 
Fu cking ridiculous, makro economics at play here, raising interest rates is going to do bugger all to stem the tide of rising oil and fuel costs and therefore inflation.
 
Yay! Going to pick up nice cheap houses when I get back to SA! :D
 
Not funny. Not at all. But I've been predicting this for the last 8 months.
 
This will take the repo rate to 13.5% and the prime rate, which banks charge their own customers, to 17%.
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You have got to be sh1tting me!!!! :eek::eek::eek:

It's already almost impossible to keep up with bond payments! I'm going to have to sell my house and take up residence at the nearest squatter camp!
 
gregmcc said:
You have got to be sh1tting me!!!! :eek::eek::eek:

It's already almost impossible to keep up with bond payments! I'm going to have to sell my house and take up residence at the nearest squatter camp!
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Typical Banana Republic. The middle class gets crushed leaving a small elite while everybody else lives in their own sewage.
 
alanf85 said:
Typical Banana Republic. The middle class gets crushed leaving a small elite while everybody else lives in their own sewage.
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Can't be helped.
Each day the dollar loses value, this eqautes to higher gas prices (among other factors) in the USA and overseas (us, Europe etc.). This creates inflation.

Government spending leads to more money being created - meaning saturation has to take place so inflation is pushed.

Government raise interest levels to stop people from borrwing. In the end, this does work. We WILL have a bump ride though

Its funny how the dollar can screw the world :D This is why the USA is so important
 
boramk said:
Can't be helped.
Each day the dollar loses value, this eqautes to higher gas prices (among other factors) in the USA and overseas (us, Europe etc.). This creates inflation.

Government spending leads to more money being created - meaning saturation has to take place so inflation is pushed.

Government raise interest levels to stop people from borrwing. In the end, this does work. We WILL have a bump ride though

Its funny how the dollar can screw the world :D This is why the USA is so important
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A depreciating dollar doesn't raise oil prices in areas outside the US on its own, because they'll be paying for oil with a stronger currency. It doesn't help that the rand's dropping fast though. :(
 
Syndyre said:
A depreciating dollar doesn't raise oil prices in areas outside the US on its own, because they'll be paying for oil with a stronger currency. It doesn't help that the rand's dropping fast though. :(
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It does acually, oil is pegged to the dollar anyways :D
The Rand is just dying:sick:
 
kingmonty said:
source

:eek: :eek: :eek:

That will have a devastating impact on the poor and middle class of this country. I hope everyone here has their credit under control.
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The middle class are going to k@k, they always do. The poor however are not affected nearly as much as they are not bonded and indebted to the hilt.
Leaving inflation unchecked will hurt the poor, those living on the the breadline, more.
 
boramk said:
It does acually, oil is pegged to the dollar anyways :D
The Rand is just dying:sick:
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The rand fell yesterday because of the news about our "shocking" growth figures. Today the decline continued thanks to inflation data. There is no evidence to suggest that hiking the interest rate is going to tame the inflation beast right now. The problem is that pressures on inflation are largely due to factors entirely outside of South Africa's control. Though I agree that targeting debt is an overall fix to quell inflation, in our current situation it's not an effective fix - and may very well damage our economy further. The power outages earlier in the year ****ed this economy more than people realise. G*d only knows what the impact of the xenophobic violence is gonna turn out to be, but I can promise you it won't be good. Right now, 200 basis points is simply too much. Mboweni should have smacked a 100 basis point hike a year ago, but he chose to ***** foot amid uncertainty. It's now simply too late, and drastic moves like this will hurt the economy in the short term and possibly create massive turmoil for the already destitute citizens of the country. Recovering from such a situation will be long, and very painful.
 
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