Interests Rates And How It Affects You

Dec. 8, 2015 - PRLog -- There has been be a decision to raise interest rates by the South African Reserve Bank's monetary policy committee.It is the last one for the year.

Rates were raised 50 basis points in January 2014 and 25 basis points in July the same year. They went up 25 basis points again in July this year and have remained unchanged since then.

Among other economic indicators, on Wednesday consumer inflation data and retail trade sales figures will be released by Statistics SA. These of course influenced the Reserve Bank's monetary policy committee's decision on rates.

The reasons for the expected rate hike are: a weak rand, rising inflation, the high possibility of a rate hike in the US next month and an increase in food prices due to the drought.

The reason most influencing the possibility of a rate hike is the weakening rand. The rand touched record lows last week.

So how will you be affected by the hike rates? Your car payments, bond repayments and cost of credit will all go up and the affordability of credit will reduce i.e. you will be able to get less credit. There will be more pressure on consumers and with regards to the economy there will be lower growth expectations.

From an investing point of view you must be more wary of companies that are exposed to the consumer sector - like retailers, motor dealers, etc. Now is the time to do your homework - you can't just buy into the market and expect it will go up. But none of this is a reason to stop investing. In fact because there is going to be a squeeze on disposable income, it is going to be more and more important that you do invest - just do it as diligently as you can.

When wanting to know which shares to buy or sell let our program do the donkey work have a look !

Visit Us At  http://lsitrader.co.za