First National Bank of Namibia expects the Bank of Namibia to keep the repo rate unchanged in 2026. FNB economist, Mandisa van Wyk, points out that elevated inflation risks from higher oil prices, weak growth, and exchange rate volatility warrant a cautious stance.
On 29 April 2026, the Bank of Namibia’s (BoN’s) MPC announced its unanimous decision to keep the repo rate unchanged at 6.50%, in line with expectations. A similar stance was adopted by the South African Reserve Bank’s (SARB’s) MPC, which also opted to leave the policy rate unchanged at 6.75% at its March 2026 meeting.
In its latest Monetary Policy Committee (MPC) review, FNB notes that the interest rate differential between Namibia and South Africa remains at 25 basis points.
“The need to safeguard the currency peg and maintain adequate import cover limits scope for easing, despite temporary support to reserves from mining-related inflows. Monetary policy is therefore likely to remain cautious, with any sustained departure from baseline conditions increasing the risk of a policy shift,” the FNB report reads.
Meanwhile, BoN indicated that average inflation eased to 2.5% in the first quarter of 2026, largely driven by lower prices for food and non-alcoholic beverages, as well as deflation in the transport category.
FNB further points out that inflation expectations have since been revised upwards to 3.7% for 2026, before moderating to 3.4% in 2027.
“This upward revision reflects rising oil and food prices, ongoing exchange rate volatility, and the impact of the prolonged escalation in the Middle East. Similarly, given these risks, we have revised our own inflation expectations higher to 4.2% and 3.4% respectively for 2026 and 2027,” FNB states.
Moreover, the latest figures indicate that real GDP growth slowed to 1.7% in 2025, reflecting contractions in the primary sector and weaker momentum across both secondary and tertiary industries.
The BoN has, therefore, revised its growth outlook downward to 2.6% (previously 3.8%) for 2026, with a modest recovery to 2.9% (prev. 4.3%) expected in 2027.
In addition, the BoN’s outlook remains subject to notable downside risks, including the ongoing conflict in the Middle East. In contrast, FNB economists hold a more cautious near-term growth outlook, at 1.2% in 2026, with a stronger rebound of 3.1% anticipated in 2027.