Share

Restrain your purchases, urges Absa

Johannesburg - Consumers should not commit to huge home and car loans to take advantage of low interest rates, as these are expected to start rising at the end of 2011, Absa Retail Bank CEO Gavin Opperman said on Thursday.

"Consumers should bank the savings that they have realised on their vehicle and mortgage finance instalments since the reductions of interest rates began in 2008 and reached their lowest levels in more than 30 years," Opperman said.

He was responding to the SA Reserve Bank's announcement that the repo rate would remain unchanged at 5.5%. The prime rate would stay at 9%.

"Even though the SA Reserve Bank's Monetary Policy Committee (MPC) decided to leave interest rates unchanged at their second meeting for 2011 which ended today (Thursday), consumers should not be tempted into lavish spending as levels of indebtedness remain high."

Opperman said the rate cuts since late 2008 up to late 2010 had caused vehicle and mortgage finance to become more affordable, impacting positively on vehicle sales and property transactions.

However, food and fuel price hikes, together with other inflationary pressures, could lead to an increase in the repo rate towards the end of 2011 and in early 2012.

"As a result, consumers should live within their means, make use of a budget of income and expenses, eliminate unnecessary spending on luxury and non-essential items, saving on a monthly basis, and paying cash for purchases where possible," he said.
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.0%
Rand - Pound
23.91
-0.0%
Rand - Euro
20.41
+0.1%
Rand - Aus dollar
12.34
+0.0%
Rand - Yen
0.13
-0.1%
Platinum
908.05
+1.2%
Palladium
1,014.94
+1.3%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders