UASA welcomes the unanimous decision by the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) to cut the repo rate by 100 basis points (1%) to 4.25% after an emergency meeting to respond to the impact of Covid-19.
The emergency cut was prompted by the extended Covid-19 lockdown and a slower recovery that creates a downside risk to inflation and allows further room for monetary policy to respond to the shock the virus dealt our economy.
Indebted home-owners will be relieved with the second drop in home loan repayments within a month. While this makes for more disposable income or provides some relief, UASA urges its members and the public in general to use the extra money in hand to settle debts or keep on paying the same amount towards their home loans as they did before the rate cuts, if at all possible.
The MPC expects gross domestic product to contract by 6.1% in 2020, compared to the -0.2% expected in the last MPC statement in March 2020 and the expected job bloodbath may hit workers sooner than expected.
Difficult times lie ahead and the best action anyone can take now is to protect themselves as well as they can against financial distress by living frugally and spend wisely.
For further enquiries or to set up a personal interview, contact Stanford Mazhindu at 074 978 3415.