Bank of Namibia maintains Repurchase Rate at 6.50 percent, amid of strong foreign reserves

Windhoek, Namibia, Capital Markets in Africa — Bank of Namibia keeps the Repurchase (Repo) rate unchanged at 6.50 percent at the Monetary Policy Committee  meeting held on the 20^th October 2015 ,  according to Monetary Policy Committee (MPC) statement issued by Deputy Governor  of the Bank,  Mr. Ebson Uanguta.

In the statement, the decision to keep the rate at 6.50 percent was underpinned by the recent improvement in the key economic indicators despite weak activities in the mining sector.  The Repo rate was raised by 25 basis points in February and June 2015, to contain high growth in household credit, which are primarily used to finance unproductive imported luxury goods, hence putting pressure on the foreign reserves of the country. 

Bank of Namibia’s statement also highlighted that the declined in the annual inflation rate during the first nine months of 2015 will persist for the rest of 2015. The overall inflation moderated to 3.3 percent in September 2015, down from 3.4 percent in August.

Furthermore, the statement emphasized that foreign reserves (about N$13.00 billion as at the 19^th October 2015) remains sufficient to sustain the one-to-one link of the Namibian Dollar to the South African Rand, being 3.3 times higher than the currency in circulation at the end of August 2015. However, the bank pointed out the risks to the Namibian economic outlook to include soft commodity prices  and the prevailing drought.