{"id":100663,"date":"2025-09-19T10:44:57","date_gmt":"2025-09-19T08:44:57","guid":{"rendered":"https:\/\/radioislam.org.za\/a\/?p=100663"},"modified":"2025-09-19T10:44:57","modified_gmt":"2025-09-19T08:44:57","slug":"asri-report-reserve-banks-decision-leaves-south-africans-facing-high-borrowing-costs","status":"publish","type":"post","link":"https:\/\/radioislam.org.za\/a\/asri-report-reserve-banks-decision-leaves-south-africans-facing-high-borrowing-costs\/","title":{"rendered":"ASRI Report: Reserve Bank\u2019s Decision Leaves South Africans Facing High Borrowing Costs"},"content":{"rendered":"

Neelam Rahim | neelam@radioislam.co.za<\/a>
\n3-minute read
\n19 September 2025 | 10:35 CAT<\/p>\n

\"\"

\ud83d\udcf8 Economist Rashaad Amra unpacks how the Reserve Bank\u2019s decision to keep interest rates unchanged leaves South Africans grappling with high borrowing costs, unemployment, and global economic pressures.<\/p><\/div>\n

The South African Reserve Bank\u2019s Monetary Policy Committee (MPC) announced yesterday that it would maintain the repo rate at 7%, with the prime lending rate remaining at 10.5%. The decision surprised many economists and market watchers who expected a rate cut in line with other countries easing borrowing costs to stimulate sluggish growth.<\/p>\n

On the ASRI Report<\/em><\/a>, Economist Rashaad Amra unpacked the implications for ordinary South Africans. He explained that while inflation has eased to 3.3% driven by slow global and domestic growth and a weaker dollar, the central bank\u2019s cautious stance means no relief for households burdened by expensive loans. \u201cIf you have a home loan, if you finance your vehicle, even if you have a credit card, it means there\u2019s no relief. It\u2019s a continuation of that pain of high interest rates,\u201d Amra said.<\/p>\n

The Reserve Bank\u2019s decision is rooted in inflation expectations, which are how businesses, workers, and consumers anticipate future prices. \u201cIf we have a shop, or if you\u2019re engaging in a wage negotiation with your boss, you might want a 5% or 7% increase. Those expectations are a significant determinant of actual inflation,\u201d Amra explained. But he cautioned that while the Bank is conservative and cautious, South Africa could benefit from stimulus through lower borrowing costs to boost growth.<\/p>\n

Growth numbers have shown some modest improvement. The economy grew by 0.8% in the second quarter compared to the first quarter, and by 0.6% compared to the same period last year. While this momentum is encouraging, Amra stressed that the key challenge is unemployment. \u201cWe have unemployed numbers at 16.8 million. The official unemployment rate is 33%, and the broad rat counting discouraged job seekers is 43%. That\u2019s mind-blowing,\u201d he noted. For Amra, true recovery lies not in rising corporate profits but in livelihoods: \u201cOur indicator should be how the average African is doing, rather than whether some of us can afford another Umrah or an X5.\u201d<\/p>\n

The rand, meanwhile, remains highly vulnerable to international shocks. As one of the most traded currencies in the world, it often fluctuates not because of South African trade but due to global investor sentiment and financial speculation. \u201cThe rand is a proxy for emerging markets,\u201d Amra explained. \u201cWhen it weakens, we see immediate knock-on effects higher petrol prices, more expensive food, and a general rise in living costs.\u201d<\/p>\n

Structural challenges further weigh on growth. Amra pointed to load-shedding and transport bottlenecks as long-standing policy failures.\u00a0While the appointment of Kgosientsho Ramokgopa\u00a0<\/strong>as energy minister has seen significant improvements in energy supply, with only two cumulative weeks of load-shedding in 20 months, the legacy of inaction remains damaging.<\/span>\u00a0\u201cIf this was done 10 years ago, you\u2019d have seen more investment, growth, and job creation,\u201d Amra said. He also noted small wins, such as the Durban fuel hub lease and steps toward private sector access to rail, but emphasised that these remain insufficient for a meaningful recovery.<\/p>\n

Globally, South Africa faces additional pressures from rising borrowing costs, geopolitical tensions, and the transition to green energy. Amra cautioned that while international donors push for decarbonisation, South Africa must set its own priorities. \u201cWe need to look at the short-term impact on jobs and investment. There\u2019s a sequencing in terms of priorities,\u201d he argued. Trade wars between the US and China, as well as uncertainty around AGOA and access to US markets, further threaten the country\u2019s economic stability.<\/p>\n

Amra concluded that South Africa\u2019s path forward requires striking a balance between global realities and domestic resilience. \u201cWe\u2019ve de-industrialised and become dependent on global markets. The next chapter will have to be written in turbulent times, and that means focusing on re-industrialisation, job creation, and policies that strengthen our own capacity.\u201d<\/p>\n

Listen<\/strong> to the full ASRI Report<\/em> <\/a>on Sabahul Muslim<\/em> with Moualan Sulaimaan Ravat and Rashaad Amra.<\/p>\n","protected":false},"excerpt":{"rendered":"

Neelam Rahim | neelam@radioislam.co.za 3-minute read 19 September 2025 | 10:35 CAT The South African Reserve Bank\u2019s Monetary Policy Committee (MPC) announced yesterday that it would maintain the repo rate at 7%, with the prime lending rate remaining at 10.5%. The decision surprised many economists and market watchers who expected a rate cut in line […]<\/p>\n","protected":false},"author":29,"featured_media":100664,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[28,4995],"tags":[],"class_list":["post-100663","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news","category-south-africa"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/radioislam.org.za\/a\/wp-content\/uploads\/2025\/09\/ASRI-Report-2.jpeg?fit=1600%2C1600&ssl=1","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"jetpack_shortlink":"https:\/\/wp.me\/pc0QIf-qbB","jetpack_likes_enabled":true,"publishpress_future_action":{"enabled":false,"date":"2026-04-19 19:37:34","action":"change-status","newStatus":"draft","terms":[],"taxonomy":"category","extraData":[]},"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"_links":{"self":[{"href":"https:\/\/radioislam.org.za\/a\/wp-json\/wp\/v2\/posts\/100663","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/radioislam.org.za\/a\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/radioislam.org.za\/a\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/radioislam.org.za\/a\/wp-json\/wp\/v2\/users\/29"}],"replies":[{"embeddable":true,"href":"https:\/\/radioislam.org.za\/a\/wp-json\/wp\/v2\/comments?post=100663"}],"version-history":[{"count":0,"href":"https:\/\/radioislam.org.za\/a\/wp-json\/wp\/v2\/posts\/100663\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/radioislam.org.za\/a\/wp-json\/wp\/v2\/media\/100664"}],"wp:attachment":[{"href":"https:\/\/radioislam.org.za\/a\/wp-json\/wp\/v2\/media?parent=100663"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/radioislam.org.za\/a\/wp-json\/wp\/v2\/categories?post=100663"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/radioislam.org.za\/a\/wp-json\/wp\/v2\/tags?post=100663"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}