by SAVIOUS KWINIKA
JOHANNESBURG, (CAJ News) – FIRST National Bank (FNB) will raise its prime lending rate by 0.25 percentage points to 10.75 percent following the South African Reserve Bank (SARB) Monetary Policy Committee’s decision to increase the repo rate.
The new rate will apply to all prime-linked accounts from Friday.
FNB CEO Lytania Johnson said the increase reflected the Reserve Bank’s continued commitment to maintaining price stability amid elevated inflation risks.
“While the rate increase will place additional pressure on borrowing costs for households and businesses, it is important to recognise the broader objective of anchoring inflation expectations and supporting long-term economic stability,” she said.
Johnson said the decision came against weaker domestic economic conditions and heightened global uncertainty, with subdued growth, elevated unemployment and higher living costs continuing to weigh on consumers.
FNB Chief Economist Mamello Matikinca-Ngwenya said the 25-basis-point increase reflected the need to reinforce policy credibility as external inflation risks intensified and inflation expectations remained above the SARB’s three percent objective.
Higher oil prices and tighter global financial conditions had increased the risk of imported inflation pressures spreading into broader price-setting behaviour, particularly through fuel costs and the exchange rate, she said.
“While weak domestic growth warranted caution, the hike signals the MPC’s commitment to pre-empting second-round effects and anchoring expectations, without necessarily implying the start of a prolonged tightening cycle,” Matikinca-Ngwenya said.
Johnson said affordability pressures were likely to remain a key consideration, urging customers to maintain healthy financial habits, manage debt responsibly and build adequate savings buffers.
FNB said customers facing financial pressure could access tailored repayment solutions and debt relief options through its digital platforms and branches.
– CAJ News