HILARY JOFFE: If state can’t pay its way, it should not expect the Bank to do so
26 July 2020 - 00:08
If short-term money is so cheap, why is long-term money so expensive? With inflation well under control and the economy crashing, the Reserve Bank cut interest rates yet again this week, which means the benchmark repo rate has dropped from 6.5% at the start of this year to 3.5% — and the prime interest rate, off which banks price overdrafts and other loans, has come down. The last time short-term rates were this low in SA was in the early 1970s. But try to borrow longer term — as the government has to do in large quantities — and it's not a happy picture...
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