Bank of Namibia keeps repo rate at 7.75% to safeguard peg with South Africa

WINDHOEK, Feb. 16 — Namibia’s central bank on Wednesday decided to keep the repo rate unchanged at 7.75 percent to continue safeguarding the peg between the Namibian dollar and the South African rand while supporting the domestic economy. Speaking at the announcement in the capital of Windhoek, Johannes Gawaxab, the governor of the Bank of Namibia, said the committee noted the continued disinflation both globally and domestically. With real interest rates remaining positive and slow credit growth amid a fair level of international reserves, the Monetary Policy Committee (MPC) decided to maintain the repo rate at its current level. According to the bank, domestic economic activity expanded during 2023, as reflected in sectors such as mining, electricity generation, and livestock while activity in the construction sector remained weak. Going forward, gross domestic product growth is projected to decelerate from a revised 6.4 percent in 2022 to 3.9 percent in 2023 and further down to 3.4 percent in 2024, he said. “The downward trajectory in growth is characterized by the expected slower growth in the primary and secondary industries, in part due to uncertain weather conditions.” Annual inflation moderated to 5.9 percent in 2023 and slowed to 5.4 percent in January 2024, the bank said.