Namibia Keeps Interest Rate at 7.75%
Namibia’s central bank left its key lending rate steady at 7.75% on February 14th 2024, holding borrowing costs at the highest level since April 2019 for the fourth consecutive meeting.
Policymakers said the decision was aimed at continue safeguarding the peg between the Namibia Dollar and the South African Rand while supporting the domestic economy.
The monetary authority also sticks to its forecasts for this year’s economic growth and inflation. The southern African country’s repo rate has been at 7.75% since June 2023.
“With real interest rates remaining positive, and slow credit growth, amid a fair level of international reserves, the MPC (Monetary Policy Committee) decided to maintain the repo rate at its current level,” the Bank of Namibia said in a statement.
Inflation edged up to 5.4% year on year in January from 5.3% in December. It is projected to average 4.8% in 2024, the bank said, sticking to the same forecast given at its last MPC meeting in December.
The bank sees the economy growing 3.4% this year, down from 3.9% in 2023, the same projection given in December. As well as price stability, the Bank of Namibia tries to safeguard the 1:1 link between the Namibian dollar and neighbouring South Africa’s rand.
Central bank governor Johannes Gawaxab said the economy was seeing healthy foreign direct investment flows related to energy exploration, but that had yet to translate into large benefits for Namibians via jobs or an improvement in the country’s international reserves.
“The benefits will probably come through once we have constructed the production fields, “Gawaxab told reporters.
Namibia has no oil and gas production but has attracted huge interest from energy companies after the discovery of resources by TotalEnergies and Shell. # Namibia Keeps Interest Rate at 7.75%
