Lower Interest Rates & Lower Lockdown Levels
The South African Reserve Bank cut interest rates by a further 0.5% last week, bringing the prime lending rate (the rate of which banks lend to customers) down to 7.25%. The last time Interest rates were at these levels was in November 1973!
This is great news for the consumer and should help to stimulate domestic economic activity. Lower interest rates will bring relief to many financially stressed households as repayments on all forms of credit, including mortgage bonds, car finance and personal loans will come down.
Of course the other side of the coin is that low interest rates are not good for retired people, without debt, who have enjoyed inflation-beating returns from cash for several years. Now is probably a good time for investors to look at alternatives to cash and we are well placed to assist should this apply to you.
The Coronavirus pandemic has confronted South Africa with the same dilemma faced by other countries, namely how to balance the need to reduce the spread of the virus and avoid the health system being overwhelmed, with the need to save jobs and prevent economic collapse. After more than 9 weeks of lockdown, it is hoped the move to Level 3 on Monday 1st June will go some way to re-booting the economy.
Accrue has been operating on a work from home basis throughout the lockdown and whilst this will broadly continue, Level 3 will allow for face to face meetings at our offices as and when required. In accordance with World Health Organisation guidelines, please note the following:
Our office will be thoroughly cleaned and sanitized on a regular basis.
Both staff and clients will be required to wear face masks.
Everyone entering the office will have their temperature taken and contact details recorded.
Alcohol-based sanitizers will be available.
Social distancing practices will be strictly followed.
We sincerely hope you and your families are keeping safe, healthy and sane during this difficult time and we pledge to continue offering our full range of financial advisory services and to keep you informed.