It's episode 10 of Season 2 and we are already in June, feeling that the end of the year is fast approaching. Arthi and Malika thought it was the perfect time to discuss what is in your best INTEREST,especially since in South Africa, we are experiencing an increase in interest rates which is impacting our budgets and quality of life.In this episode, they help us understand the drivers of interest rates, and how they impact us.
Arthi introduces four factors that affect the interest rate, firstly inflation. Companies increase the price of the goods and services when there's more demand, because this can lead to less supply, and those differences result in inflation.
The next two factors are the stock markets and international events and the decrease in available funds directly results in changes in the interest rates.
The final driver which affects interest rates is fiscal borrowing and in South Africa we have a large fiscal deficit. The deficit is the difference between governments income versus their expenses and when the government spends more money than what is coming in this means that in order to have the funds to pay back the markets, the rates are increased.
Arthi and Malika offer insights and tips into how you can respond and work with the change in interest rates and to look for opportunities within the chaos. Arthi also explains how it is not all negative and that there is a plus side to higher rates.
Listen in to hear Malika and Arthi discuss:
And so much more!
Remember: “never pay for an item longer than, which that item may last”
We would love to hear your views based on the concepts covered in this episode.
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This episode is proudly sponsored by Old Mutual Wealth.