Rate cut next week!

[Ou grote]

Sorry, but I agree with them.

To drop interest rates now before the holiday season is not wise as we may be setting the Rand up to speculators over the quiet period in the markets and any hope of R6 a litre for petrol will be dashed out of the window.

Petrol is not the only concern. If the carry trade starts to move money out of our market too quickly this will also lend to the Rand becoming unstable. We could revisit R12, maybe R13 to the Dollar very quickly.

If it was me I would wait for the end of January when everyone comes back to work and see if the world has come back to its senses first and then see which way the wind is blowing. If it looks favourable then cut in February or wait for April. Reserve Bank could even drop by 2% in April next year to stimulate the market before it goes into winter mode.

A half a percentage point now in my opinion is a waste of time.

Agreed, mostly because SA consumers are stupid.

Also, huge rate cuts are not good for pensioners living on interest.

 

[sand_man]

I reckon 0.5% drop would send the right message and that is the obvious one, SA consumers have, in the words of the great but banned "Skinner", tightened their belts...

The Rands instability IMO is based on uncertainty in foreign investment in emerging markets and Zim's continued and unabated political instability, very little else

Interest rate hikes IMO has and always will be a knee jerk reaction by the reserve bank trying to counter macro economics over which they have no control. The net result is bankrupt businesses, rampant unemployment and increased vehicle and home repossessions...Futile exercise IMO...

 

[EtienneK]

I reckon .5% drop would send the right message and that is the obvious one, SA consumers have, in the words of the great but banned "Skinner", tightened their seat belts...

<offtopic> Skinner got banned?! Why did I not witness or why wasn't I aware of this joyous act of wonderfulness? </offtopic>

 

[sand_man]

<offtopic> Skinner got banned?! Why did I not witness or why wasn't I aware of this joyous act of wonderfulness? </offtopic>

hehe... you liked him to eh?

http://mybroadband.co.za/vb/memberlist.php?do=getall

 

[Abe]

I reckon 0.5% drop would send the right message and that is the obvious one, SA consumers have, in the words of the great but banned "Skinner", tightened their belts...

That is not a good thing for the economy as a whole. It's good for individuals but the country would rather have people spending then saving as that feeds a recession.

 

[supersunbird]

That is not a good thing for the economy as a whole. It's good for individuals but the country would rather have people spending then saving as that feeds a recession.

Please explain this further, my brain is interpreting contradictory information here.

 

[Abe]

Please explain this further, my brain is interpreting contradictory information here.

When people start to save instead of spend money, that fuels a recession. Companies do the same thing. They cut back on unnecessary spending, retrench staff etc because they are selling less because people are saving and not spending. It gets worse when prices start to drop. People then hold off on spending because they wait for a "better" deal.

What you want is people saving when the times are good and spending when times are bad. That is why governments like the UK are trying to encourage people to spend money which will stimulate the economy.

 

[Ou grote]

less than 2 hours till the announcement.

Everybody here reckons it's a 1% cut.
I say 0.5% - I am always right.

 

[supersunbird]

0.5 would be great...

1 would be awesome + legendary...

1.5... well there ain't words to describe that...

 

[ToxicBunny]

I will be surprised if its anything more than 0.5%.. and even that I think is somewhat silly given the position we're all in...

 

[sand_man]

I'm inclined to stick with 0.5% but 1.5% would be biblical, not going to happen though... I would guess 70% chance of 0.5%, 29% chance of 1.0% and 1% chance of 1.5%...

 

[Abe]

I will even be happy with a 0.5% cut as I think right now, it's 50/50 between 0.5 and nothing.

 

[Abe]

Remember that the cut will negatively effect the exchange rate which will result in a higher inflation rate, but right now, I think the economy desparately needs an injection of some sort.

 

[Fuma]

Suppose it's 1% cut and my bond is about R5K per month, how much will I save?

 

[JK8]

less than 2 hours till the announcement.

Everybody here reckons it's a 1% cut.
I say 0.5% - I am always right.

Ive been right more times than you
Its 1%

 

[Abe]

On a bond of R1 million, you will save about R833 per month for a 1% cut.

 

[sand_man]

Suppose it's 1% cut and my bond is about R5K per month, how much will I save?

Sounds like your home loan is around R350k so a 1% drop would amount to around R300 saving...Correct me if I am wrong..

 

[Abe]

Sounds like your home loan is around R350k so a 1% drop would amount to around R300 saving...Correct me if I am wrong..

It's 1/12 of 1%, so R350K is R291.

 

[sand_man]

I will even be happy with a 0.5% cut as I think right now, it's 50/50 between 0.5 and nothing.

mmm... I didn't consider there wouldn't be a reduction but I reckon the possibility of no change is small, 5% maybe...

 

[sand_man]

It's 1/12 of 1%, so R350K is R291.

Agreed or R83 per R100k... 6 of the one and half a dozen of the other... Currently we paying R1430 per R100k borrowed. Correct me if I'm wrong...