The Bank of Namibia kept its main interest rate unchanged at 6.75% for the third consecutive monetary policy meeting on Wednesday (13), stating that it aimed to protect the peg between the local currency and the South African rand, while simultaneously supporting the domestic economy.
According to Reuters, neighboring South Africa — whose economy is closely linked to Namibia’s — cut its rate by 25 basis points last month.
Bank of Namibia Governor Johannes Gawaxab said that keeping the country’s interest rate unchanged, while South Africa lowered its rate in July, helped reduce the gap between the two countries’ rates.
He stated that Namibia’s rate, now 25 basis points below South Africa’s, struck a balance between promoting local economic growth and maintaining stable capital flows.
The institution lowered its inflation forecasts for 2025 and 2026 by 0.1 percentage point on Wednesday, to 3.8% and 4.2%, respectively, reflecting lower crude oil price expectations. Inflation in the southern African country stood at 3.5% in July.
The central bank also revised down its economic growth forecasts for this year and next, citing a challenging environment for the agriculture, mining, and manufacturing sectors.
GDP growth is expected to be 3.5% in 2025, down from the 3.8% projected in June, and 3.9% in 2026, down from the previously forecast 4.0%.
Source: Diário Económico
