Following the South African Reserve Bank’s decision earlier today to keep interest rates at their previous level, FNB will maintain its prime lending rate at 10% and review its position following the next SARB MPC meeting in November.
FNB CEO Jacques Celliers says: “The Reserve Bank presents us with wide-ranging insights into current and predicted economic conditions. After two quarters of contraction in the economy, we believe that this tough cycle is an opportunity to improve efficiency in order to position South Africa for a better growth path. For consumers and small businesses, this is an opportunity to review the management of their finances to align with current economic reality. We also encourage our customers to maximise the value of our money management solutions and digital banking capabilities which can help them save costs.”
Mamello Matikinca, FNB Chief Economist says: “The SARB’s decision to keep the repo rate steady at 6.5% was in line with our and consensus expectations. The downside surprise in the August inflation print (4.9% y/y) showed that demand side inflation remains relatively well contained, with almost all the pressure coming from a weaker currency and higher oil price. The Reserve Bank, however, continues to see upside risks to the inflation outlook, particularly as escalating tensions around the US imposition of trade tariffs hold the potential to precipitate further Emerging Market (EM) currency weakness. While the central bank’s primary mandate is price stability, they remain mindful of the weak domestic growth environment, and as such, kept rates unchanged in the hope that doing so can assist a very modest growth recovery in the second half of 2018. Nevertheless, as US monetary policy normalisation continues, we expect the MPC to begin a gradual rate hiking cycle at the November meeting.”
In its recent full-year results, FNB produced excellent results against the backdrop of a tough economy, building on its consistent strategy of cross-sell of products and services into its existing customer base. The bank reported a sharp rise in the usage of its digital channels, with the FNB App recording a 65% rise in transactional volumes.