Consumer Interest Rate Risks Explored: Interview with Thabani Ndwandwe, Chief Risk Officer at Standard Bank SA
In Business Day Spotlight, host Mudiwa Gavaza engages with Thabani Ndwandwe, chief risk officer at Standard Bank SA, to discuss the direct impact of rising interest rates on consumer finances.
The South African Reserve Bank (SARB) kept the repo rate unchanged at 8.25% this week.
Ndwandwe highlights the effect of the interest rate hiking cycle that began in late 2021, illustrating it with an example of a house bond, which surged from R20 000 to R28 000.
He explains that borrowing costs have risen faster than incomes for South Africans, with bank data showing an average income growth of about 6%. While June's inflation slowed to 5.4%, staying within the SARB 3%‒6% target range, the full impact of cumulative rate hikes is yet to be realised.
Ndwandwe emphasises the importance of Standard Bank's focus on assisting consumers during the current downturn.
Topics of discussion include the effect of interest rates on consumer finances, risks for different economic groups, inflation trends and an outlook for the coming year.
To find out more, listen here.