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December 4, 2007

High interest rates a threat to BEE deals

Black economic empowerment (BEE) deals have been able to absorb the effect of higher interest rates due to the fundamental strength of assets underlying the deals and the revenue they generate. But if interest rates remain high for a while, some deals may be at risk.


This is the view of players in the industry, ahead of a possible further increase in interest rates, after a rise in the prime lending rate to 14 percent from 10.5 percent in June last year. The Reserve Bank will decide on Thursday whether to raise rates again as inflation continues to breach the 6 percent ceiling of its target range.

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Posted by StaffWriter at December 4, 2007 12:36 PM