Repo Rate Unchanged At 5,5 Percent

THE Bank of Namibia last week left the repo rate unchanged at 5,5%, saying the country’s prospects for 2014 are encouraging, as economic growth is expected to continue and inflation remains at sustainable levels.

“International reserves are still able to sustain the fixed exchange rate, although the rapid growth of imports and sustained double digit growth of instalment credit may put pressure on reserves, this warranting monitoring,” the bank said.

The central bank said in line with global economic developments, the performance of the Namibian economy remained broadly satisfactory during the first two months of 2014 and expects economic growth to continue and inflation to remain at sustainable levels.

“The domestic economy is forecasted to grow by 5,3% in 2014. This growth is expected to be supported by a sustained rapid pace of construction activities and mining, as well as g growth in consumer demand,” the bank said.

The central bank said inflation is anticipated to increase slightly in the second quarter of 2014, although it is expected to remain below six percent.

The bank further said the stock of international reserves stood at N$17,5 billion, a level it says remains sufficient to maintain the fixed exchange rate to the rand. “Going forward, the rapid growth imports and the sustained double digit growth rate in installment credit may put pressure on reserves, thus warranting monitoring.”

Source : The Namibian