FNB announced that it will not change the prime lending rate at 10.5% , Following the South African Reserve Bank’s decision this week to keep interest rates unchanged until March 2017. According to the bank’s CEO, Jacques Celliers, FNB is now seeing the results of concerted efforts across all sectors to reverse the decline of 2016.
“Last year Government, labour and the private sector stood together to fight against a ratings downgrade. We have gained tremendous momentum and this will continue, as we saw recently at the World Economic Forum in Davos,” says Celliers.
“I am excited by our concerted efforts to turn this around. There was a dip in confidence in the 4th quarter of 2016 according to our FNB/BER Consumer Confidence Index, but a number of positive factors have recently emerged. GDP forecasts now indicate improved growth prospects for 2017,” adds Mr Celliers.
Mr Celliers continued to urge consumers to act with care when taking new loans and to ensure their budgets could accommodate possible increases in municipal rates, electricity and transport.
Sizwe Nxedlana, Chief Economist at FNB adds that the monetary policy committee opted to keep rates on hold as anticipated. “The statement highlighted that the MPC remains concerned about the inflation outlook, while inflation is expected to moderate in the months ahead and return within the Bank’s target in 2H17, risks to this outlook remain on the upside.”
“Food prices, specifically meat, are expected to limit the improvement of the inflation rate. Indeed the rand has stabilised and should offer some support to the inflation outlook, however, risks stemming from global events could destabilize the rand in the months ahead, and could defer the expected improvement of the inflation rate. As such we believe the SARB will opt to keep rates on hold until greater policy clarity from the US emerges,” he says.