NAMIBIAN CENTRAL BANKS CUTS BENCHMARK RATE BY 25 BASIS POINTS TO 6.75 PCT

WINDHOEK, The Bank of Namibia (BoN) has cut its benchmark repo rate by 25 basis points to 6.75 per cent.

Speaking at the second Monetary Policy announcement for 2017 here Wednesday, the central bank's Deputy Governor, Ebson Uanguta, said the BoN decided to support domestic economic growth, while maintaining the one-to-one link between the Namibia dollar (NAD) and the South Africa Rand.

Uanguta said the domestic economy remained weak during the first six months of 2017. "The performance was mainly reflected in the construction, manufacturing, wholesale and retail trade, as well as transport sectors," he said.

He acknowledged that there were a few pockets of improvement in sectors such as mining, communications and livestock during the period, which some stimulus to the real economy.

The BoN took into account Namibia's inflation rate, which averaged at seven per cent during the first six months of 2017, compared with 6.3 per cent during the same period last year. There has been a slowdown in inflation since the beginning of this year, mainly attributable to lower food inflation, while growth in private sector credit extension continued to slow down.

"The annual rate of PSCE (private sector credit extension) growth stood at 8.5 per cent on average during the review period, lower than the 12.5 per cent recorded over the same period in 2016," he said.

He added that the slower growth in PSCE was primarily because of reduced growth in credit advanced to both the household and corporate sectors, especially in the form of mortgage and installment credit. This means Namibians are buying less on credit and thinking twice about signing a mortgage.

Source: NAM NEWS NETWORK