FNB CEO warns of possible rate hike

MARCH 27, 2015

First National Bank (FNB) CEO, Jacques Celliers, has reportedly warned that the decline in the value of the rand and a likely reversal of the downward trend in inflation rates may nudge the SA Reserve Bank towards a rate hike later in the year.

Celliers warns that consumers may come under increasing pressure during April and they should take great care when taking on new loans.

This comes after Reserve Bank left the repo rate unchanged at 5.75%.

Governor Lesetja Kganyago also warned that South Africans should expect to pay more for food due to the current drought. He said the downward trend in consumer inflation can no longer be sustained. 

"The downward trend in CPI is forecast to be reversed in the coming months, following the severe drought in maize producing countries.

With reduced maize crop estimations, SA is likely to become a net exporter of maize. Spot prices have moved closer to import parity,” Celliers told the SABC.