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The South African Reserve bank recently announced an increase in the policy interest rate of 100 bases points, bringing the new policy rate to 4%

The South African Reserve bank recently announced an increase in the policy interest rate of 100 bases points, bringing the new policy rate to 4% and market interest rate to 5%. At the time of the announcement John was deciding whether to open a 1 year fixed deposit account that will yield him a 5 % return. Assuming an inflation rate of 5 % at the time of the announcement, do you think John should open that fixed deposit account?

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