Banks increase lending rates

THE rate rise by the central bank has seen the ripple effect of the commercial banks rising their prime and home loan base rates will increase from 13,75 per cent to 14,25 per cent.

Standard Bank, First National Bank, Bank Windhoek and Nedbank all made the announcements in line with the Bank of Namibia’s increase in its prime-lending rate by 0,50 per cent with effect from Monday, from nine per cent to 9,5 per cent. According to Nedbank Marketing Communications Executive, Phil Silcock a new bond repayment on a house for N$500 000 at the current rate of 14,25 per cent over 20 years (240 months) is N$6 307,58.Previously at 13,75 it was N$6126, 08.The current rate interest would have effected an increase of N$185, 50.The vehicle and asset finance rate which is linked to the prime lending rate will also increase to 14,25 per cent.Standard Bank Managing Director, Mpumzi Pupuma said, “the announcement of the interest rate hike is in response to the latest data release by the National Planning Commission, which showed that inflation rose to 6,90 per cent in April from 6,30 per cent in March.”Unexpected high fuel prices and food prices, coupled with strong consumer consumption and credit demand have contributed positively to inflationary pressures.Containing inflation is important for economic growth.”The central bank justified its repo rate hike towards containing inflation which has been on the rise since the beginning of the year.Inflation has been on a surge and was up at 6,9 per cent in April from 6,3 per cent in March.Official data reveals that growth in mortgage credit went up at a rate of 26,2 per cent during April.However, in line with declined growth in credit extension BoN said there were signs of slowdown in other demand indicators, such as lukewarm new vehicle sales, which went down by a monthly rate of 29 per cent and annual rate of 16 per cent during April.Commercial vehicle sales said BoN Deputy Governor Paul Hartmann “displayed a sharp decline of 31,7 per cent (monthly basis) and 12 per cent (annual basis) during the same period.”According to Nedbank Marketing Communications Executive, Phil Silcock a new bond repayment on a house for N$500 000 at the current rate of 14,25 per cent over 20 years (240 months) is N$6 307,58.Previously at 13,75 it was N$6126, 08.The current rate interest would have effected an increase of N$185, 50.The vehicle and asset finance rate which is linked to the prime lending rate will also increase to 14,25 per cent.Standard Bank Managing Director, Mpumzi Pupuma said, “the announcement of the interest rate hike is in response to the latest data release by the National Planning Commission, which showed that inflation rose to 6,90 per cent in April from 6,30 per cent in March.”Unexpected high fuel prices and food prices, coupled with strong consumer consumption and credit demand have contributed positively to inflationary pressures.Containing inflation is important for economic growth.”The central bank justified its repo rate hike towards containing inflation which has been on the rise since the beginning of the year.Inflation has been on a surge and was up at 6,9 per cent in April from 6,3 per cent in March.Official data reveals that growth in mortgage credit went up at a rate of 26,2 per cent during April.However, in line with declined growth in credit extension BoN said there were signs of slowdown in other demand indicators, such as lukewarm new vehicle sales, which went down by a monthly rate of 29 per cent and annual rate of 16 per cent during April.Commercial vehicle sales said BoN Deputy Governor Paul Hartmann “displayed a sharp decline of 31,7 per cent (monthly basis) and 12 per cent (annual basis) during the same period.”