Repo vs Prime

[Quintrix]

Hi all

The current prime vs repo rates is 6,75% vs 10,25%. This is a difference of 3.5%.

Somehow I remember these two to be closer together. Has it always been this much of a gap or does the gap vary over time?

What would be a good rate on a bond today?

 

[AchmatK]

I only remember that is always been a 3.5% difference.

In a high interest rate cycle the banks are less likely to offer much less than prime. When the repo rate is low then they are more likely to offer prime -1%/-1.5%.

Anything at prime and below should be good. My first bond in 2005 was at prime -1% and current bond taken in 2011 is at prime.

 

[bchip]

https://businesstech.co.za/news/columns/110913/sa-repo-rate-vs-prime-rate-2005-2015/

 

[diapason]

The current prime vs repo rates is 6,75% vs 10,25%. This is a difference of 3.5%.

Somehow I remember these two to be closer together.

The difference used to be 2.5%. It was changed around 20 years ago. Unfortunately, I don't remember the reason for the change.

 

[Quintrix]

Interesting process to watch the banks trying to offer you a better rate than their competitors