10.5% following the decision earlier taken today by the South African
Reserve Bank (SARB) Monetary Policy Committee to leave rates unchanged
until the final MPC meeting for 2016 on 24 November. The decision
applies to all prime-linked accounts.
"We are seeing a gradual recovery in business activity from a sharp
contraction earlier in the year," says FNB CEO Jacques Celliers.
"Consumers, however, remain extremely cautious and low levels of
confidence are restraining growth. We have seen an impressive growth
in savings placed at FNB showing a high level of resilience in these
tough times."
Yet, while activity remains at this low point, there are clear
opportunities for expansion in sectors benefiting from currency
weakness and lower prices such as property and tourism," adds Mr
Celliers.
"This period of stable interest rates offers indebted consumers an
ideal opportunity to reduce their lending and create greater personal
financial stability. We continue to see stable credit health across
our consumer and business sectors; indicating that the majority of
customers are weathering current tough conditions. I urge those
customers experiencing difficulty to approach their bank to
restructure loans rather than defaulting," Says Mr Celliers
Says Sizwe Nxedlana, Chief Economist at FNB; "The SARB's decision to
keep rates on hold comes as very little surprise given the weak
economic growth backdrop and an inflation outlook that is likely to
improve. While GDP surprised on the upside in 2Q16 leading indicators
suggests that growth in 3Q16 will be softer. Headline inflation has
persistently surprised to the downside and does not look set to move
meaningfully above 6% for the year as a whole. Furthermore, underlying
inflationary pressures have remained contained with core inflation
averaging 5.5% year to date. The early parts of 2017 should see
headline inflation rate return comfortably within the SARB's target
range. The rand exchange rate has remained relatively stable over the
past few months, this combined with the downturn in international
agricultural commodity prices as well as easy global monetary policy
conditions suggests that the central bank may have reached the peak of
its hiking cycle," adds Mr Nxedlana