Johannesburg - South Africans should use the unchanged repo rate at 5.75 percent as an opportunity and stay within their budgets, First National Bank said on Thursday.
"Consumers have been cheered by lower fuel prices and we are seeing lower inflation on the horizon. We can expect further reductions in fuel prices and inflation during February, but this does not mean we should throw caution to the wind," said FNB CEO Jacques Celliers.
"Borrowers now have an open window of opportunity to reduce their debts as lower prices offer an instant cash boost... People should stay within their budgets."
Celliers said that consumers should bear in mind the guidance given by the finance minister in his medium term budget policy statement regarding the possibility of changes to tax rates in 2015.
The SA Reserve Bank's monetary policy committee announced on Thursday that the repo rate would remain unchanged at 5.75 percent.
The domestic economic outlook remained subdued, SARB governor Lesetja Kganyago said in Pretoria.
He said that the rand had been affected by domestic factors including the rolling power blackouts by Eskom.
The unchanged repo rate meant that the prime lending rate remained at 9.25 percent.
FNB chief economist Sizwe Nxedlana said that the unchanged repo rate was in line with expectations.
"It will be extremely difficult for the SARB to justify any interest rates increases in this disinflationary environment," Nxedlana said.
"As a result, we expect the SARB to keep rates unchanged for the duration of 2015."
FNB said it would keep its prime lending rate at 9.25 percent.
Nedbank announced on Thursday that there would be no change to their current prime overdraft rate, the vehicle and asset finance rate and the mortgage rate applicable to home loans.
The charitable donations made on behalf of clients to a Nedbank Affinity linked investment account will remain unchanged.
Kganyago said that for some time SARB had emphasised that it was in a process of interest rate normalisation.
"The lower inflation path gives us some room to pause in this process, particularly against the backdrop of continued weakness in the economy," he said in Pretoria.
He said the domestic economic outlook remained subdued, despite an expected growth acceleration in the fourth quarter of 2014.
SARB's forecast for growth in 2015 has been revised down from 2.5 percent to 2.2 percent, and for 2016 from 2.9 percent to 2.4
percent.
"The MPC is aware that the moderation in inflation could raise expectations of lower interest rates," he said.
"The MPC is of the view that the bar for further accommodation remains high and would require a sustained decline in the inflation rate and inflation expectations."
Kganyago said the rand had also been affected by domestic factors, including the disappointing domestic growth and current account deficit outcomes and rolling blackouts implemented by Eskom.
In September, the repo rate remained unchanged at 5.75 percent, after it was increased by 25 basis points in July from 5.5 percent.
In March and May the repo rate remained unchanged, after it was increased by 50 basis points from five percent in January.
Sapa