First National Bank (FNB) will maintain its prime lending rate at existing levels following the decision taken earlier today by the SA Reserve Bank Monetary Policy Committee (SARB MPC) to leave rates unchanged. The bank will review its interest rates following the next MPC meeting in May. The decision applies to all prime-linked accounts.
“Recent surges in oil prices and the sharp depreciation of the rand have set the stage for increased inflationary pressures. However, South Africa’s economy continues to exhibit a strong structural bias towards low inflation. Against this backdrop, we welcome the Monetary Policy Committee’s decision to hold rates steady, which provides important relief and certainty for households and businesses navigating a still challenging economic environment,” says FNB CEO Harry Kellan.
“As we note monetary policy decisions across the globe, it is evident that central banks will be cautious as the ramifications of the ongoing war in the Middle East unfold,” says Mamello Matikinca-Ngwenya, FNB Chief Economist.
“While South Africa’s current inflation rate is at the 3% target and surveyed inflation expectations showed further softening in 1Q26, the country is a net-importer of petroleum products and will be exposed to higher energy costs from April. A prolonged period of elevated oil prices would shift South Africa from a period of enjoying fuel price deflation to one of renewed fuel-driven inflationary pressure.
Unfortunately, fuel price deflation, alongside slow food and core goods inflation, compensated for unagile price-setting behaviour in the economy. Therefore, upside fuel and rand risks, along with the potential for second-round effects, raise the degree of uncertainty around the inflation trajectory and limits the SARB’s room to continue cutting rates,” she adds.
“While we acknowledge that we are confronting an inflation shock that is likely to reverberate across the entire economy and sustain shifts in market expectations, we remain constructive on the South African economy’s outlook. Continued efforts to improve the country’s competitiveness and productivity should uphold longer-term growth prospects and structurally lower inflation and interest rates,” Matikinca-Ngwenya explains.
Kellan emphasises that in an uncertain environment, both consumers and businesses should remain mindful of their borrowing decisions and overall affordability. Customers are encouraged to actively manage their finances and simplify their banking by making use of the wide range of digital services available on the FNB Banking App and the bank’s Nav channel.
FNB continues to support customers who may be under financial pressure through tailored repayment solutions and debt relief options. Customers experiencing financial difficulty are encouraged to contact FNB through its digital and in-branch channels to discuss available support. The bank also reviews investment rates weekly, independently of the SARB’s Monetary Policy Committee announcements. Any changes to rates are communicated in branches and on FNB’s website, www.fnb.co.za
SUPPLIED.
