Standard Bank's prime lending rate stays unchanged

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That leaves the repurchase rate at 5.75% and the prime lending rate at 9.25%, which provides some relief to highly indebted South African consumers who are already struggling to make ends meet given current debt levels that are at 76% of household income.

The decision to leave the repo rate unchanged means the interest rate at which commercial banks lend to consumers, the prime lending rate, will remain at 9.25%.

"Market forces have driven up our cost of living and our ability to repay credit. Even though rates are low, our budgets have been under pressure," says Sugendhree Reddy, head of Personal Banking at Standard Bank.

Cumulative effect

"We tend to ignore individual increases in our cost of living, as a R20 increase on a tank of petrol or 60 cents added to a pack of cigarettes is not going to break the bank. However, the cumulative effect of these increases is significant. What many people are not aware of is, that if our cost of living goes up, so do the costs of suppliers. These costs are then passed on to consumers, thus making daily purchases more expensive."

In order to better absorb the rising cost of living, Standard Bank recommends that consumers examine their budgets and try to cut out any inefficiency. A good start would be to try and pay down the most expensive debt first, such as retail clothing accounts and cancelling non-essential services.

"Even though the interest rates remain unchanged, the reality is that consumers should tighten their belts. The ideal scenario is to not have any debt at all. As we approach the end of the year, this may be a good time to reflect on your finances and make a commitment to get on a path to financial stability. If you do find yourself in financial difficulties talk to your bank," concludes Reddy.