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Namibian Monetary Policy Committee (MPC) has decided to lower the Repo Rate by 0.25 per centage points to 7.5%, to support the domestic economy and maintain the peg between the Namibia Dollar and the South African Rand, announced Bank of Namibia Governor, Johannes !Gawaxab.
Namibian Monetary Policy Committee (MPC) has decided to lower the Repo Rate by 0.25 per centage points to 7.5%, to support the domestic economy and maintain the peg between the Namibia Dollar and the South African Rand, announced Bank of Namibia Governor, Johannes !Gawaxab .
This decision was made following a comprehensive review of domestic, regional, and global economic developments. The MPC observed that despite the gradual global disinflation, most monitored central banks have remained restrictive even though some have taken the first step in easing monetary policy, stated the Governor. According to him, Namibia’s economic activity remained on a recovery path but with a lower growth rate forecast for 2024, in part due to drought-induced setbacks.
There has been a slowdown in inflation. Private sector credit extension has been weak for a protracted period and the domestic economy, in aggregate, was also deemed in need of essential support. With inflation and inflation expectations slowing and nominal interest rates unchanged, real interest rates have increased. !Gawaxab meanwhile said commercial banks are accordingly expected to reduce their lending rates by 25 basis points and to speedily transmit the interest relief to borrowers.
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The bank’s prime lending rate will therefore decline from 11.50% to 11.25%, he said. This policy stance will continue to support domestic economic activity and safeguard the one-to-one link between the Namibia Dollar and the South African Rand supported by the adequate stock of international reserves. The MPC is of the view that as the monetary policy easing cycle progresses, the margin between the repo rates of the Bank of Namibia and the South African Reserve Bank will again narrow.
