International reserves at N$59.7 billion amid global headwinds

The Bank of Namibia (BoN) says international stock reserves are strong enough to sustain Namibia’s currency against other currencies despite heightened global tensions.

The stock of international reserves stood at N$59.7 billion as at the end of March, which is lower compared to N$64.3 billion recorded at the end of January.

The decline was due to rising imports and government payments.

“This level of foreign reserves translates to an estimated import cover of 3.9 months, which is deemed adequate to sustain the currency peg between the Namibia dollar and the South African rand and to meet the country’s international financial obligations.

“It is also above the international benchmark of a country’s foreign reserves holdings of three months,” BoN governor Johannes !Gawaxab said yesterday.

The repo rate is maintained at 6.75%.
The decision taken by the bank’s monetary policy committee (MPC) is aimed at safeguarding the peg between the Namibia dollar and the South African rand, while supporting the domestic economy amid heightened global policy uncertainty.

!Gawaxab said the decision was reached following a comprehensive review of current and expected domestic, regional and global economic developments.

Private sector credit extension (PSCE) remained subdued and unchanged at 3.8% since the previous MPC meeting.
Prime lending rates are expected to remain at 10.50% by commercial banks.

“We are facing uncertain times and turbulence, and trade tariffs will directly and indirectly impact Namibia and the global economy,” !Gawaxab said.

He said real gross domestic product (GDP) expanded at a solid pace of 3.7% in 2024, compared to 4.4% in 2023, while the merchandise trade deficit narrowed at N$4.6 billion.

Since the start of April this year, the Namibia dollar’s exchange rate against major currencies has, on balance, depreciated primarily due to elevated global uncertainty following the escalation in global trade tensions.

The most recent levels of the exchange rate, !Gawxab said, are also weaker than those at the previous meeting as uncertainty remains elevated.

The inflation rate has edged up to 4.2% in March 2025, compared to 3.2% recorded in January 2025, driven by housing, food, transport, and alcoholic beverages.

!Gawaxab said the average inflation forecasts for both 2025 and 2026 have been revised upwards to 4.2% and 4.5%, respectively, compared to previous forecasts of 4.0% and 4.4%.

The upward revision is primarily due to a weaker exchange rate and higher administered price assumptions.

In an age of information overload, Sunrise is The Namibian’s morning briefing, delivered at 6h00 from Monday to Friday. It offers a curated rundown of the most important stories from the past 24 hours – occasionally with a light, witty touch. It’s an essential way to stay informed. Subscribe and join our newsletter community.