Does Consumption Growth Respond Asymmetrically to Positive and Negative Repo Rate Changes?

  • Eliphas Ndou
  • Nombulelo Gumata
  • Mthokozisi Mncedisi Tshuma


Evidence shows that household consumption declines by a big margin to a repo rate tightening compared to an increase due to repo rate loosening. This indicates significant asymmetry in the household consumption  response to the repo rate changes. The implications are that repo rate tightening tends to have large impact on household  consumption compared to those due to the repo rate loosening. Furthermore, evidence shows that household consumption adjusts much faster to correct when the consumption  dis-equilibrium is above compared to when it is below the long-run equilibrium level.


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© The Author(s) 2019

Authors and Affiliations

  • Eliphas Ndou
    • 1
  • Nombulelo Gumata
    • 2
  • Mthokozisi Mncedisi Tshuma
    • 3
  1. 1.South African Reserve BankPretoriaSouth Africa
  2. 2.PretoriaSouth Africa
  3. 3.National Planning Commission SecretariatPretoriaSouth Africa

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