The Reserve Bank’s decision to hike the repo rate is not “anti-poor” (“Reserve Bank’s lighter touch signals interest rates are near peak”, January 26). On the contrary, it is a calculated measure to decrease the high inflation rate in the medium and long-term.
Raising the cost of borrowing money discourages people from taking out loans and thereby leaves less disposable income for them to use. This ultimately curbs the demand for goods and services and averts demand-pull inflation, which is typically caused by a rise in disposable income.
There is nothing exceptional about what has been said here — these are the basics of economics. That so many people are unaware of them should be a cause for concern.
Perhaps we should consider making economics a compulsory subject in the school curriculum so such confusion can be avoided.
Ayanda Sakhile Zulu
Via email
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