WINDHOEK – Namibia’s four commercial banks have increased their prime rates and home loan rates to 9.75 percent and 10.75 percent respectively following the Bank of Namibia’s (BoN’s) decision to increase the repo rate by 0.25 percentage points to 6.0 percent.
According to BoN’s Monetary Policy Committee the decision was taken to curb the strong growth in household credit, which the central bank says is largely financing unproductive imported luxury goods and putting additional pressure on the country’s international reserves.
Implementation dates for the new rates were Friday, 22 August, for Bank Windhoek and Standard Bank Namibia, Saturday, 23 August for Nedbank and Monday, 25 August, for First National Bank Namibia.
Daniel Motinga, Head of Research at FNB Namibia, said the decision by the Bank of Namibia was based on their concern about household gearing and the impact of consumer spending on the balance of payments and specifically the foreign reserves.
Regarding possible additional rate hikes for the rest of the year, Motinga added: “BoN will most likely largely follow the gradual pace provided by the South Africa Reserve Bank, given the weak global and regional macro-economic backdrop.”
“FNB Namibia has given quite a number of tips over the last few weeks on how to save and what to do in order to ensure that debt does not get out of control. The most important factor is not to borrow to try and meet short-term wants or to compete with your neighbours. We hope that people take some of the advice to heart and can now cover any additional interest costs they are faced with, especially if they have a house, car or other debt,” added Motinga.