Tag Archives: interest rate

Tourism double score

The tourism industry celebrated good news on two fronts yesterday  –  a 1 % percentage point drop in the interest rate, and the announcement that the 2009 Indian Premier League cricket matches will be hosted in South Africa from 18 April – 24 May.

The Governor of the Reserve Bank Tito Mboweni announced the drop in the interest rate, bringing the interest rate down to 13 %, its lowest level since June 2007.   The Reserve Bank’s Monetary Policy Committee will be meeting monthly from now onwards, paving the way for regular rate cuts in future.

England lost to South Africa in hosting the Indian Premier League tournament, which had to be shifted away from India due to safety concerns.   The Indian government felt that it could not guarantee the safety of the players due to elections being held in India during April and May, given the attacks on the Sri Lankan cricket team in Mumbai in November.   South Africa was chosen mainly due to concerns over the weather in England in April, and the county cricket season being underway in the UK at the same time, reports Sky News.

Twelve South African cricketers, including Graeme Smith, Morne Morkel, Tyrone Henderson, JP Duminy, Ryan McLaren, Herschelle Gibbs and AB de Villiers, have been contracted to Indian teams for the 2009 Indian Premier League season, reports www.southafrica.info.

Later this year, South Africa will host the 2009 cricket Champions Trophy, from 24 September – 5 October, at the Wanderers and Centurion stadia in Johannesburg and Pretoria, respectively.   South Africa, Australia, New Zealand, Pakistan, Sri Lanka and the United Arab Emirates will compete for the trophy.

Interest rate cut welcomed

The 1 % cut in the interest rate, down to 14 %, is widely welcomed, and should be excellent news for the tourism industry.   

The announcement by Reserve Bank Governor Tito Mboweni yesterday was accompanied by a warning to local politicians about the global credit crunch, and the effect that it could have on South Africa.   “We are going to go through a rough patch over the next three or four years”, he said, reports Business Report.  He did not foresee a recession for South Africa, but described the recent World Economic Forum as “a memorial service for the world economy”!

Mboweni wanted to cut the rate by 2 percentage points, he said, but stated that his committee had urged him to take a more cautious approach to the interest rate cut.  A further 1 % cut in April appears likely.

The interest rate cut good news should offset the disappointing increase by 61 cents per litre in the price of petrol earlier this week.

Petrol price drop greater than estimated

The drop in the price of petrol by R 1,35 per litre at midnight is most welcome for the tourism industry, bringing the new price of petrol at the coast to R 5,76 per litre, the same price as in March 2007!   The decrease in the petrol price is larger than was estimated last week.

The price of diesel has dropped by R 1,68 per litre, to R 6, 39 per litre.

The drop in the price of petrol and diesel will have a positive effect on tourism, and should make itself felt in an increase in tourism to the Garden Route and country towns and villages, as well as in a decrease in food prices, which should reduce the rate of inflation, which should bring about a cut in the interest rate in February.   This is welcome news for cash-strapped South Africans, who probably over-extended themselves over the festive season.