An emergency meeting by the Monetary Policy Committee should spell one thing – Interest rate cut, in light of the recession we are in marked by an increase in inflation, GDP pointing south and a shrinkage in the mining and manufacturing sectors of the economy.
Anticipation is rife for a 1% decrease in the interest rate which should aid in fine tuning the wheels of the country’s economy but at grass roots level what does a 1% decrease in interest translate to?

If you are like me and live in a borrowed house and drive a borrowed car (need I go to the very clothes on my back?) a 1% reduction makes me sigh in relief as this means a couple hundred rands in my back pocket. Reason calls me to keep paying the mortgage at the current rate as this will reduce the tenure of the borrowing but the thought of lining my stomach with a prime matured steak and other luxuries I had relegated to better times . Instant gratification vs. a sound investment move, maybe wisdom will prevail the next time we get another rate cut possibly mid April?

The stock market ended the week on a high, with a high likelihood that it could be interest rate induced I guess we will watch and see what happens after today`s extra ordinary meeting.

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