The outlook remains finely balanced as policymakers weigh their next move, with inflation at the upper end of the target range, the rand under persistent pressure from global uncertainty, and the MPC having already ended its three-year pause in May.
The lowest interest rate in a generation was not the cheapest money in a generation.
In September 2020, prime sat at 7% - its lowest in decades. With inflation at 3.2%, the real cost of that debt was only 3.8%, says Prizm Property Partners.
The Durban-based real estate company says that by July 2022, prime had climbed to 9% and was still rising. “Debt felt expensive. Yet with inflation at 8%, the real cost of borrowing had dropped to just 1% - the cheapest in the entire period the chart covers.
The company says this points to three turning points. It says that at each one, the nominal rate and the real cost of borrowing moved in opposite directions.
