The Bank of Namibia (BoN) has welcomed the decision by commercial banks to reduce the spread between the repo rate and prime lending rates by a total of 25 basis points.
In a statement issued on Thursday, BoN acting deputy director of corporate communications and sustainability Naufiku Hamunime said the adjustment will be implemented in two phases, with the first reduction of 12.5 basis points taking effect on 30 September, and a further 12.5 basis points expected by 31 December.
According to BoN, the policy measure is intended to make credit more affordable for households and businesses, while also stimulating domestic economic activity and investment.
“Namibia has historically maintained a wider spread compared to its Common Monetary Area peers, South Africa, Lesotho and Eswatini, where the margin has remained at 3.50 percentage points. In Namibia, the spread has been 3.75 percentage points since 2010,” the statement read.
BoN governor Johannes !Gawaxab commended the banking sector for responding to the central bank’s guidance, describing the adjustment as “a significant and necessary step towards ensuring a more equitable and inclusive financial system.”
BoN said it will continue to monitor developments to ensure that the intended benefits reach consumers and businesses, and that cost savings are effectively passed on.
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