Construction welcomes interest rate cut, Indawo
Construction industry welcomes rate cut, but more is needed.
The dramatic announcement on Tuesday 14 April 2020 by the South African Reserve Bank to cut the repo rate to 4,25%, bringing the mortgage lending rate to 7,75%, is a clear indication that the bank is taking the COVID-19 threat very seriously. Building refurbishment company, Indawo says that the rate cut indicates a willingness from the government to save jobs and while the rate cut assists business and consumers, a lot more still needs to be done to drive the economy to a positive position.
Indawo chairman, Peter Jäck, says that commercial banks have a big role to play to assist business in their efforts to save jobs and consumers to save their homes. There is still a long road to recovery, but the industry welcomes the efforts by the SARB to drive economic momentum upward during some of the most challenging times the world faces. Having said that, Indawo believes that SARB’s efforts should still see further cuts if they expect business to recover from this global disaster. Interest rates are down to 1% in some countries, giving South Africa an indication of what can be done to drive economic recovery, and put more cash into entrepreneurial hands to create sustainable jobs.
This rate cut on top of the recent one announced brings the cuts to a full 200 basis points, representing a significant saving for debt-ridden South Africans, giving some hope to cash-strapped employees and businesses.
While maintenance work cannot be carried out until lockdown is lifted, home and building owners are able to start budgeting for those much-needed repairs once business returns to the new normal. In the meantime, Indawo is an approved essential services provider during lockdown and can attend to emergency structural repairs, especially as we move into an expected rainy period in April.