Repo stays steady

FOR the second time this year, the Bank of Namibia (BoN) has decided to keep its repo rate unchanged at nine per cent – in line with expectations – after a meeting by the Monetary Policy Management Committee (MMC).

“Considering the economic developments, the MMC is of the opinion that an increase in the bank rate at this stage would run the risk of excessively depressing domestic demand, which may adversely affect real sector growth,” BoN Governor, Tom Alweendo announced after the meeting yesterday. He said a review of the recent economic developments, the committee had noticed a moderation in inflation, which has remained at a low single-digit rate, hovering at around six per cent.Alweendo added that the central bank would, however, continue monitoring inflationary risks like rising food prices and uncertainties about weather conditions that could reduce agricultural production, the weakening local currency and the unstable international oil prices.”Having considered the latest inflation developments, forecasts and expectations the MMC does not expect the Namibia inflation rate to abate significantly in the immediate future as inflationary pressures are expected to persist.”Although growth in banks’ credit to the private sector remained strong, there has been a slowdown since the last quarter of 2006.The annual growth rate of credit expansion to the non-government sector slowed to 15,5 per cent in February from 18,3 per cent in October.Delivering his monetary statement earlier, according to foreign press services, South Africa’s central bank governor, Tito Mboweni, said that country’s CPIX inflation outlook had degenerated.”The most recent forecast of the South African Reserve Bank’s forecasting body indicates a deterioration in the inflation outlook, mainly as a result of adverse developments in the international oil markets,” Reuters quoted Mboweni as saying.Namibia and South Africa share a Common Monetary Area (CMA) with Lesotho and Swaziland, and the Namibian dollar is pegged to the rand – the currency of the powerful neighbouring economy.He said a review of the recent economic developments, the committee had noticed a moderation in inflation, which has remained at a low single-digit rate, hovering at around six per cent.Alweendo added that the central bank would, however, continue monitoring inflationary risks like rising food prices and uncertainties about weather conditions that could reduce agricultural production, the weakening local currency and the unstable international oil prices.”Having considered the latest inflation developments, forecasts and expectations the MMC does not expect the Namibia inflation rate to abate significantly in the immediate future as inflationary pressures are expected to persist.”Although growth in banks’ credit to the private sector remained strong, there has been a slowdown since the last quarter of 2006.The annual growth rate of credit expansion to the non-government sector slowed to 15,5 per cent in February from 18,3 per cent in October.Delivering his monetary statement earlier, according to foreign press services, South Africa’s central bank governor, Tito Mboweni, said that country’s CPIX inflation outlook had degenerated.”The most recent forecast of the South African Reserve Bank’s forecasting body indicates a deterioration in the inflation outlook, mainly as a result of adverse developments in the international oil markets,” Reuters quoted Mboweni as saying.Namibia and South Africa share a Common Monetary Area (CMA) with Lesotho and Swaziland, and the Namibian dollar is pegged to the rand – the currency of the powerful neighbouring economy.