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Banks' 'lock step' cuts slated

May 28 2009 18:40 Michael Hamlyn

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Cape Town - The finance spokesperson for the opposition Democratic Alliance, Dion George, on Thursday welcomed the 100 basis point cut in the repo rate announced by the SA Reserve Bank governor.

"The DA welcomes the reduction and supports the view that this relief will not encourage consumers to increase their indebtedness, given the virtually static rate of credit extension over the past few months," George said. "South African consumers have been battered by the local effects of the global economic crisis and are likely to take this opportunity to reduce their debt and, hopefully, increase their savings."

George also took the opportunity of urging the banks not to cut their own interest rates "in lock step" with each other.

"Will one or more banks take the bold step of reducing their lending rates by more than 1%?" he asked. "There is no reason why lending rates should be equal across the banking sector; nor is it necessary to reduce the rate of return paid to people who hold deposits, such as pensioners and other savers.

"The banking sector now ought to demonstrate that it understands the pressures facing customers."

- I-Net Bridge

 
 
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