Following the South African Reserve Bank’s (SARB) decision to keep interest rates unchanged, FNB will maintain its prime lending rate at 7% and will review its position after the next SARB Monetary Policy Committee meeting in March 2021.
FNB CEO Jacques Celliers says, “The Covid-19 pandemic continues to impact our society due to the second wave of infections. As a result, we all have a responsibility to unite in protecting people’s health and livelihoods. By creating a safer environment for all, businesses that are closed under lockdown can trade, people can earn a living, and kids can go back to school. We remain concerned about the rebound in economic growth this year, and we hope the news of vaccines arriving later this month will provide relief for healthcare workers and the overburdened infrastructure. We also look forward to seeing the vaccination program expanded to the rest of population.”
“As a business, we are humbled to play our part by providing essential services to help customers manage certain aspects of their lives and finances. This is a consequence of our ever-expanding digital platforms for customers to manage savings, credit, budgets, or pay a traffic fine via our App. We also use our platform to connect SMEs with customers to stimulate economic activity. Similarly, we have been expanding our invest services to offer customers exposure to global stock markets from just R10. We remain committed to our partnership with customers and society in these tough times,” adds Celliers.
Chief Economist at FNB, Mamello Matikinca-Ngwenya, says “While the SARB may have decided to keep the repo rate unchanged at 3.5%, we believe there is room for further easing. The current economic shock has kept demand in the economy very low, and as a result, inflation has remained firmly anchored below the midpoint of the target band. While expected to tick up in the coming months (mainly pushed up by food, electricity, and water prices), inflation should remain well contained over the medium term. We expect inflation to average 3.8% in 2021 on the back of lower insurance and rental inflation.”
“High-frequency data shows that while the economy continued to expand into 4Q20, the recovery trend was losing steam. Importantly, these trends emerged before the implementation of level 3 lockdown restrictions in December. This is in line with our expectation of a moderate rebound in SA’s GDP growth (around 3.2% y/y this year), from a deep contraction (around -7.2% y/y) in 2020. Risks to this view are a third wave of the virus, which will lead to further lockdown measures and frustrations to rolling out vaccines,” concludes Matikinca-Ngwenya.
DID YOU KNOW?
FNB customers have access to digital channels to manage their finances from anywhere. Not only do these cater for traditional banking, credit and investment needs but the nav>> suite of services support various needs including budgeting, property, vehicle, and other day-to-day matters:
- nav>>Home makes it possible to view properties, get valuations on existing properties and apply for finance, and it connects local small, medium-sized and microenterprises and pre-vetted tradesmen with homeowners for safe, trusted and seamless service and payments;
- nav>>Car lets customers value their vehicles, pay traffic fines and renew their vehicle licence discs from within the app;
- nav>>Money lets customers track their spending, compile budgets and check their credit scores.
INFO SUPPLIED BY FNB.