Consumers urged to be cautious with Black Friday spending
With interest rates going up, consumers already hit by the high value-added tax, fuel prices and utility tariffs, will feel the pinch.
CAPE TOWN - Consumers might want to go easy on Black Friday spending, especially if you're buying on credit.
On Thursday, Reserve Bank Governor Lesetja Kganyago announced a hike of 25 basis points in the repo rate, increasing it from 6.5% to 6.75%.
With interest rates going up, consumers, already hit by the high value-added tax, fuel prices and utility tariffs, will feel the pinch.
Economist Thabi Leoka says Kganyago's announcement has put him in the same box as the Grinch who stole Christmas.
"The cost of borrowing will be higher, the cost of servicing debt will be higher. It's happening at a time when consumers typically spend money for Christmas and also spend money for schools and school fees after Christmas. So the timing of it is not good."
Meanwhile, economist Isaac Mathekgo says the decision just adds to the woes of people who are struggling to repay debt.
"Consumers have been grappling with a number of higher costs, for instance, electricity tariffs are higher. We've seen shopping increases and fuel prices since about April, so this will add to pressures on the consumer."
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(Edited by Mihlali Ntsabo)