Two banks increase Prime Lending and Mortgage rates

18 Apr 2016 12:20pm
WINDHOEK, 18 APR (NAMPA) – Commercial banks have decided to increase their Prime Lending and Mortgage Lending rates by 0,25 per cent due to the increase of the central bank’s repo rate this month.
The Bank of Namibia (BoN) on 13 April, for the second time this year, increased the repo rate by 25 basis points from 6,75 per cent to 7 per cent, to prevent possible capital outflows, which could put pressure on the country's international reserves.
Namibia's international reserves stood at N.dollars 26.6 billion.
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.
In a statement issued on Friday, Bank Windhoek said it decided to increase its Prime Lending and Mortgage Lending rates by 0,25 per cent as from 18 April 2016.
Chief Treasurer Claire Hobbs said the rates were increased to protect the currency peg and prevent capital outflow out of Namibia.
“The Monetary Policy Committee noted slowing global growth and rising inflation risks as concerns whose impact on the local economy will be watched closely,” Hobbs said.
The decision on the national repo rate is normally taken during the BoN Monetary Policy Committee’s bi-monthly meeting.
Standard Bank Namibia manager for Public Relations and Corporate Communication Surihe Gaomas-Guchu on Monday issued a statement that the bank has increased its lending rates with 0,25 per cent as from 13 April 2016.
Gaomas-Guchu said the blue bank's vehicle and asset finance rates will continue being linked to the prime lending rate and will be re-priced accordingly.
Standard Bank’s prime lending rate will increase from 10,50 per cent to 10,75 per cent while the mortgage lending rate will increase from 11,50 per cent to 11,75 per cent.
NedBank Namibia and FNB Namibia have not announced a response to an increase in the BoN’s repo rate.