The rate decisions taken by both the South African Reserve Bank (SARB) and its global counterparts in the past nine months are set in broad macroeconomic trends that have been in place for years, and which have made this speedy and sizable reaction to the COVID-19 pandemic possible. Now, will these trends remain in place in the coming years?
We believe these measures were crucial for building and maintaining sound lending practices. Nowadays, borrower-based measures are widely used in the EU and throughout the world. However, as we move into the post-pandemic “new normal”, we should be very wary of the new risks revealed by the COVID-19 crisis.