The repo rate will remain unchanged at 6.50% until mid-June, the Bank of Namibia (BoN) has announced.
As a result, commercial banks are expected to keep their prime lending rates at 10%.
The central bank says the policy stance was necessary to safeguard the Namibia dollar’s peg to the South African rand. Last month, the South African Reserve Bank left its repo rate unchanged at 6.75%.
“In determining the appropriate monetary policy stance, the monetary policy committee noted weak domestic economic activity and credit extension amid a higher inflation forecast for 2026.
“The committee further noted the escalation of geopolitical tensions in the Middle East, mindful of uncertainties regarding the duration of the war and the intensity of the spillover effects thereof,” BoN governor Ebson Uanguta says.
He says following the escalation of geopolitical tensions in the Middle East, key central banks have largely instituted a “wait-and-see approach” towards monetary policy setting.
“The exceptions were the central banks of Brazil and Russia, which eased policy rates during the period under review amid easing inflation and slowed domestic demand,” Uanguta says.
Meanwhile, the central bank says food and oil prices are expected to rise in the coming months with inflation likely to record an average of 3.7% for the year, before moderating to 3.4% in 2027.
“Risks to the domestic inflation outlook remain tilted to the upside, notably through potential increases in administered prices, exchange rate volatility, and the spillover effects of the prolonged war in the Middle East,” the governor says.
The next monetary police committee meeting will be held on 15 and 16 June.
