{"id":64796,"date":"2024-04-21T17:42:11","date_gmt":"2024-04-21T17:42:11","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/reserve-bank-interest-rates-wrecking-the-economy-economist"},"modified":"2024-04-21T17:54:25","modified_gmt":"2024-04-21T17:54:25","slug":"reserve-bank-interest-rates-wrecking-the-economy-economist","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/reserve-bank-interest-rates-wrecking-the-economy-economist","title":{"rendered":"Reserve Bank interest rates wrecking the economy \u2013 economist"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>Economist Roelof Botha said the South African Reserve Bank\u2019s (SARB) high interest rates are stifling investment in the country, hurting the economy.<\/p>\n

Botha told Newzroom Afrika that the SARB\u2019s Monetary Policy Committee (MPC) has unnecessarily raised interest rates to levels that are far too high.<\/p>\n

In November 2021, the SARB\u2019s Monetary Policy Committee (MPC) started its current hiking cycle when it noticed an upward trend in the country\u2019s inflation.<\/p>\n

Since then, it has raised interest rates by a cumulative 475 basis points, with the repo rate now at a 14-year high of 8.25% and the prime lending rate at 11.75%.<\/p>\n

The MPC has said it will keep rates high until inflation sustainable comes down to the mid-point of its 3% to 6% target range of 4.5%.<\/p>\n

The latest inflation print saw March\u2019s CPI come in at 5.3%.<\/p>\n

Botha explained that South Africa does not struggle with demand-side inflation, which makes the SARB\u2019s high interest rates unnecessary.<\/p>\n

In addition, South Africa\u2019s economy is not similar to the US economy, and the SARB cannot simply target a specific inflation point. It should stick to keeping inflation within its current range.<\/p>\n

He said inflated interest rates \u2013 like South Africa\u2019s \u2013 act as a tax on venture capital.<\/p>\n

\u201cRight now, you can put your money in the bank and get between 9% and 10% interest on a fixed deposit, so why bother to start a new business and create jobs?\u201d<\/p>\n

Botha said that by lowering rates, the SARB would lower the cost of capital. This would incentivise businesses to invest more in the economy, creating jobs and growing GDP.<\/p>\n

\u201cAll this economy needs right now is low interest rates and for the government to continue looking for the assistance of the private sector,\u201d Botha said.<\/p>\n

FNB economists recently warned of a potential double-edged sword for South Africa\u2019s economy.<\/p>\n

They said that while inflation shows signs of peaking, cutting rates too soon could reignite inflation.<\/p>\n

However, the country\u2019s high interest rates are squeezing consumers and slowing growth, potentially leading to a technical recession.<\/p>\n

The economists urged the SARB to find a balance between controlling inflation and preventing a deeper economic slump.<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. Economist Roelof Botha said the South African Reserve Bank\u2019s (SARB) high interest rates are stifling investment in the country, hurting the economy. Botha told Newzroom Afrika that the SARB\u2019s Monetary Policy Committee (MPC) has unnecessarily raised interest rates to levels that are far too high. In November 2021, the SARB\u2019s Monetary Policy […]<\/p>\n","protected":false},"author":84,"featured_media":64795,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,275],"class_list":["post-64796","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nReserve Bank interest rates wrecking the economy \u2013 economist - South Africa<\/title>\n<meta name=\"description\" content=\"Economist Roelof Botha said the South African Reserve Bank\u2019s (SARB) high interest rates are stifling investment in the c ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/reserve-bank-interest-rates-wrecking-the-economy-economist\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Reserve Bank interest rates wrecking the economy \u2013 economist\" \/>\n<meta property=\"og:description\" content=\"Economist Roelof Botha said the South African Reserve Bank\u2019s (SARB) high interest rates are stifling investment in the c ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/reserve-bank-interest-rates-wrecking-the-economy-economist\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-21T17:42:11+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-21T17:54:25+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2024\/04\/sm_1713709342.658221.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"576\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/reserve-bank-interest-rates-wrecking-the-economy-economist#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/reserve-bank-interest-rates-wrecking-the-economy-economist\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Reserve Bank interest rates wrecking the economy \u2013 economist\",\"datePublished\":\"2024-04-21T17:42:11+00:00\",\"dateModified\":\"2024-04-21T17:54:25+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/reserve-bank-interest-rates-wrecking-the-economy-economist\"},\"wordCount\":375,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/reserve-bank-interest-rates-wrecking-the-economy-economist#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2024\/04\/sm_1713709342.658221.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/reserve-bank-interest-rates-wrecking-the-economy-economist#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/reserve-bank-interest-rates-wrecking-the-economy-economist\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/reserve-bank-interest-rates-wrecking-the-economy-economist\",\"name\":\"Reserve Bank interest rates wrecking the economy \u2013 economist - 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