Interest rate good news for some

The last time the interest rate in South Africa was between 3% and 4% – as it is now – the world was in the midst of an existential crisis.

As Middle East nations cut back on their oil production in protest at the 1973 Yom Kippur war against Israel, the world was hit with catastrophic fuel shortages. In this country – as now – there were emergency regulations which reduced the national speed limit to just 80km/h and banned the sale of petrol and diesel from Friday evening to Monday morning.

Now, according to economic experts, it looks probable that the Reserve Bank will ease the base rate to 3.5%, a shade more than the 3.14% it was in 1973. In 1973, the oil crisis resulted in gas-guzzling cars disappearing from the roads and, some believe, helped spur the “green” movement which had, at its heart, the belief that we should carefully manage the resources of our planet.

Whether that much of a realignment will happen in South African society remains to be seen, but it is clear that some sort of stimulus is needed to help pick the economy up from where it has fallen.

It’s bad news for those who save and for pensioners, though.

For more news your way, download The Citizen’s app for iOS and Android.