The Bank of Namibia’s Monetary Policy Committee (MPC) yesterday revealed that the Repo rate, the rate at which commercial banks borrow from the central bank which in turn determines interest rates, has been left unchanged at 6.75 percent. The MPC said the rate remains appropriate to maintain the one-to-one link between the Namibia Dollar and the South African Rand, while supporting domestic economic growth.
Since the previous MPC meeting in October 2018, most central banks in both the advanced economies and Emerging Market and Developing Economies (EMDEs) left their policy rates unchanged at their most recent monetary policy committee meetings. The exception was the South African Reserve Bank, which raised its repo rate in November 2018.
Meanwhile, Bank of Namibia Governor, Iipumbu Shiimi, noted that the domestic economy remained weak during the first ten months of 2018.
“Inflation remained low, but started increasing in recent months. Private Sector Credit Extension (PSCE) growth continued to be slow, while the stock of international reserves edged lower, but remained sufficient to support the currency peg,” said Shiimi at the announcement.
Shiimi continued that while domestic economic activity remained weak during the first ten months of 2018, some sectors showed signs of improvement.
“Activity in sectors such as agriculture and wholesale and retail trade continued to decline, although there were notable improvements in sectors such as mining, transport and communication as well as manufacturing. The domestic economy is expected to remain weak for 2018 as a whole,” said Shiimi. Also, annual inflation fell to an average of 4.1 percent for the first ten months of 2018 from 6.4 percent in the corresponding period of 2017. Since the previous MPC meeting, however, inflation has been trending upward from 4.4 percent in August 2018 to 4.8 percent in September and 5.1 percent in October, mainly due to rising fuel prices. However, Shiimi stated that recent declines in fuel prices suggest that the risk of further upward pressure on inflation from this source has been considerably reduced.
2018-12-06 09:32:07 4 months ago