Bank of Namibia holds repo rate at 7.75%

The Monetary Policy Committee of the Bank of Namibia has decided to keep the repo rate unchanged at 7.75 percent, with the prime lending rate holding steady at 11.50 percent. This is the second monetary policy announcement by BoN this year. Governor of the Bank Johannes !Gawaxab.

Governor !Gawaxab highlighted that risks to the domestic economic outlook have remained broadly unchanged since the previous MPC meeting, although the conflict in the Middle East has escalated notably: and external risks continue to reflect the prolonged tight global monetary policy stance,
disruptive geopolitical tensions, and geoeconomic fragmentation. Internally, adverse risks
mainly include uncertain rainfall patterns and water supply interruptions, particularly at the
coastal towns.

According to the central bank, domestic inflationary pressures eased further since the previous MPC meeting. Overall inflation slowed to an average of 5.0 percent during the first quarter of 2024, from an
average of 7.0 percent during the same period in 2023. The deceleration was predominantly driven by food and transport price inflation. Likewise, inflation decelerated to 4.5 percent in March 2024 relative to the 5.4 percent for January 2024 reported at the previous MPC meeting. Looking ahead, inflation is anticipated to slow down to 4.9 percent in 2024, 0.1 percentage point above the projection at the previous MPC meeting. The slight upward adjustment is on account of persistent geopolitical tensions which could potentially induce speculative spikes in oil prices and uncertain rainfall conditions.