JOHANNESBURG - The South African Reserve Bank (SARB) has indicated that there are risks to inflation and that if oil prices remain elevated due to the war, then a rate hike could still be implemented this year.
The Reserve Bank on Thursday kept the interest rate unchanged. The repo rate remained at 7%, leaving the prime lending rate at 10.50%.
READ | SA Reserve Bank leaves repo rate unchanged
Executive Director at the Centre for Risk Analysis (CRA) Chris Hattingh has urged consumers to use the reprieve to rein in their debt.
"If one can pay back some of those credit cards, commitments and spending as a household, just in case there might be another rate hike, you will be less exposed and less at risk should that happen," he said.
Hattingh's advice comes as an increased number of South Africans are living on the financial edge.
According to the latest Eighty20 Credit Stress report, South Africans owe around R2.7 trillion.
During the first quarter, about 41% of credit-active consumers, or about 400,000 people, were in default.
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A default is when they are three or more months in arrears on one or more loans.
Meanwhile, the latest DebtBusters survey suggested that more than half of consumers spend more than 40% of their take-home pay on repaying debt.
This is seen as unsustainable debt.
Hattingh acknowledges that reducing debt either in the short or medium term may be difficult, but there are advantages to this.
"You put yourself and your household in a much stronger position if you're able to do that," he said.