17 Feb 2016 17:30pm
WINDHOEK, 17 FEB (NAMPA) Standard Bank Namibia has increased its prime lending and home loan rates by 0,25 per cent with immediate effect.
Standard Bank Namibia Manager for Marketing and Communications, Surihe Gaomas-Guchu said this in a statement issued on Wednesday after the Bank of Namibia (BoN) announced an increase of the repo rate from 6,50 per cent to 6,75 per cent.
The repo rate refers to the rate at which the central bank lends money to commercial banks such as First National Bank (FNB) of Namibia, Standard Bank Namibia, Bank Windhoek and Nedbank Namibia in the event of any shortfall of funds.
Gaomas-Guchu said the bank's prime lending rate will increase from 10,25 to 10,50 per cent, while the home loan base-rate will increase from 11,25 to 11,50 per cent as from 17 February 2016.
The effective date for increasing the banks interest rates was 17 February 2016 and is aligned to the Bank of Namibias recent repo rate increase, she noted.
BoN Governor, Ipumbu Shiimi told members of the media on Wednesday that the decision was taken to align interest rates within the Common Monetary Area (CMA), which links South Africa, Namibia, Lesotho and Swaziland into a monetary union.
In late January 2016, South Africas repo rate was increased to 6,75 per cent in response to rising inflation, while in August 2015, Swazilands repo rate was increased to 5,75 per cent, which left homeowners with mortgages worried about the interest rate on their loans.
Shiimi said the BoN is worried about money flowing out of the country and local economy.
This decision was necessary to avoid possible capital outflows, which could put pressure on the country's reserves, he said.
Bank Windhoek on Wednesday also announced an increase to the financial institutions prime lending rate.