By Hadiza Mohammed
The Bank of Namibia on Wednesday decided to keep the repo rate unchanged at 6.50 per cent, citing the need to safeguard the one-to-one peg between the Namibia dollar and the South African rand.
Speaking at the first monetary policy announcement for the year, Governor of the central bank, Ebson Uanguta, said the policy stance was taken to ensure orderly capital flows and maintain the currency peg arrangement while supporting domestic economic activity.
He added that commercial banks are accordingly expected to maintain the prime lending rate at 10.00 per cent.
Overall growth for 2025 is now expected to be lower than earlier projected, Uanguta said, noting that economic growth slowed in the first three quarters of 2025, largely due to contractions in agriculture, fishing, mining and manufacturing sectors.
Inflation, however, remained well contained where average inflation fell to 3.5 per cent in 2025, down from 4.2 per cent in 2024, reaching a post-pandemic low.
The latest data show inflation slowed further to 2.9 per cent in January 2026.
According to Uanguta, average inflation for the whole year is projected to be at 3.5 per cent, before easing slightly in 2027.
International reserves rose to 51.9 billion Namibian dollars (about 3.2 billion dollars) at the end of January, equivalent to 3.3 months of import cover, sufficient to support the currency peg and meet international financial obligations, the central bank said. (Xinhua/NAN)