Windhoek: The Bank of Namibia (BoN) has maintained the repo rate at 6.75%, keeping the prime lending rate steady at 10.25%. This decision was announced by BoN Governor Ebson Uanguta following the Monetary Policy Committee's (MPC) fourth bi-monthly meeting held on 10 and 11 August.
According to Namibia Press Agency, Governor Uanguta stated that the committee unanimously decided to retain the rate, based on a thorough assessment of the latest economic indicators and the necessity to preserve the one-to-one peg between the Namibia Dollar and the South African Rand. He emphasized that the policy stance is intended to support international reserves and maintain the currency link.
The governor mentioned that the MPC considered the need to align interest rates with South Africa amid inflationary pressures but chose to keep the rate unchanged due to subdued domestic economic activity, a benign inflation outlook, and adequate foreign exchange reserves.
Uanguta reported that domestic economic activity slowed in the first half of 2026, with weak performance in sectors like mining, manufacturing, electricity, and transport, though agriculture and wholesale and retail trade showed improvement. The economic growth forecast for 2026 has been revised down to 2.1%, a decrease from the 1.7% growth experienced in 2025.
On the inflation front, Uanguta noted that annual headline inflation increased to 4.4% in June 2026 from 4.1% in May, largely due to higher transport prices. Inflation is projected to rise from 3.5% in 2025 to 4.0% in 2026, before easing slightly to 3.9% in 2027.
The governor highlighted that Namibia's merchandise trade deficit expanded to N$19.3 billion in the first half of 2026, compared to N$12.8 billion in the same period of 2025, primarily driven by increased import payments for mineral fuels. However, the preliminary stock of international reserves increased to N$57.1 billion by the end of July 2026, ensuring sufficient import cover to support the currency peg.
Uanguta assured that the MPC will continue to monitor economic developments closely and respond as needed to protect the currency peg. The next MPC meeting is scheduled for 26 and 27 October 2026.