The South African Reserve Bank’s (SARB) decision to keep interest rates unchanged gives consumers a timely reprieve as many are likely to be recovering from festive season spending, according to First National Bank (FNB).
“Consumers should use this reprieve to get their finances in order ahead of the next Monetary Policy Committee review and the National Budget Speech, which could see tax adjustments,” said Ester Ochse, Channel Head at FNB Financial Advisory.
“In an uncertain economic climate, building reasonable financial reserves is very important and consumers should take advantage of every opportunity to do exactly that,” she added.
Ester said consumers should pay attention to some of the following financial aspects:
• Closely monitor your budget
• Cut back on unnecessary and excessive spending
• Limit exposure to debt
• Pay off debt as quickly as possible
• Build up savings or an investments portfolio
Ester continued, saying, “The SARB’s decision is an important catalyst for consumers who are committed to saving their way out of tough economic conditions. Last year, we saw a rate-hiking cycle and interest rates haven’t been cut since, meaning those with savings will continue to earn a relatively high interest.
“Though the decision to hold interest rates will be welcomed, it’s important to note that South Africa is still in the midst of economic uncertainty. Our economy continues to struggle to create jobs and inflation remains higher than the maximum target range. However this latest move helps consumers to get a firm grip on their financial affairs.”
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