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FNB interest rates remain unchanged

27 Mar 2015

Following the decision by the South African Reserve Bank (SARB) to leave interest rates unchanged until the next Monetary Policy Committee (MPC) meeting in May, First National Bank (FNB) will maintain its prime lending rate at 9.25%.

"The decline in the value of the rand and a likely reversal of the downward trend in inflation rates may nudge the SARB towards a rate hike later in the year. Unfortunately, consumers may come under increasing pressure during April and they should take great care when taking on new loans," advises FNB CEO Jacques Celliers.

Tax-free savings

"While interest rates remain low this is an ideal time to make extra contributions to your savings, especially with the tax -ree savings opportunities created by government and tax-free accounts now offered by FNB," adds Celliers.

Sizwe Nxedlana, chief economist at FNB, says the SARB opted to leave interest rates on hold due to a weak economic outlook and the recent inflation slowdown. "Nevertheless, a combination of higher maize prices, fuel tax increases and a weak rand/US dollar exchange rate imply that the inflation relief has largely run its course. As a result, the SARB is expected to return to the path of gradual interest rate tightening in the short term."