WINDHOEK – The Bank of Namibia’s Monetary Policy Committee (MPC) yesterday confirmed that the repo rate has been left unchanged at 6.75 percent. After a review of global, regional and domestic economic and financial developments, the MPC’s decision was made to continue supporting domestic growth, while maintaining the one-to-one link between the Namibia Dollar and the South African Rand.
Making the announcement, Bank of Namibia Governor, Iipumbu Shiimi, noted that economic growth in key economies moderated during the first quarter of 2018, compared to the preceding quarter. “Monetary policy stances in key economies were generally left unchanged, except for a few central banks which increased interest rates,” said Shiimi.
He pointed out that activity in the domestic economy improved during the first six months of 2018 while inflation and the growth rate in private sector credit extension (PSCE) declined compared to a year ago, while the stock of international reserves remained sufficient.
Shiimi added that domestic economic activity improved during the first six months of 2018 relative to the corresponding period of 2017. “The improved activity was mainly observed in the mining as well as transport and communication sectors. The wholesale and retail trade sector, however, continued to decline, though at a slower pace compared to the corresponding period of 2017. Overall, the domestic economy is expected to grow by 0.6 percent in 2018 compared to the negative growth registered in 2017,” said Shiimi.
Namibia’s annual inflation fell to 3.7 percent during the first six months of 2018 from 7.0 percent during the corresponding period in 2017. The lower inflation rate was mainly due to lower price increases in the food and non-alcoholic beverages as well as housing categories. Inflation for the transport category, however, rose on average during the same period, as a result of higher fuel prices.
On a monthly basis, the inflation rate rose slightly to 4.0 percent during June 2018, from 3.8 percent in the previous month. Going forward, inflation is expected to average around 4.1 percent in 2018.