Repo rate remains unchanged

The Bank of Namibia has maintained the repo rate at 6.50 basis points, Governor Iipumbu Shiimi announced on Wednesday in Windhoek.

He said the decision was taken in order to continue supporting domestic economic activity and to maintain the one-to-one link between the Namibian Dollar and the South African Rand.

This is the final monetary policy announcement of the year.

The economic picture has not changed globally and figures of the third quarter of 2019 and they support the picture that we have seen unfolding throughout the year that global growth is slowing down. Growth in the global economy is projected to slow to 3.0 per cent in 2019, before recovering to 3.4 per cent in 2020, he said.

Shiimi added that most Advance Economise (AE's) recorded lower growth rates during the third quarter of 2019, compared to the previous quarter, while lower growth was observed in the Euro Area and the United Kingdom.

Growth ticked higher in the United States and Japan.

Economic growth in the monitored Emerging Market and Developing Economies (EMDEs) also slowed during the third quarter of 2019.

He added that Domestic economic activity slowed during the first ten months of 2019.

The inflation rate remained low, while the growth rate of Private Sector Credit Extension was broadly flat over the first ten months of 2019. The stock of international reserves continued to be sufficient to support the currency peg, he explained.

The inflation rate declined further to an average of 4.0 per cent during the first ten months of 2019.

The moderation was mainly due to a decline in housing and transport inflation. In October 2019, the inflation rate also declined further to 3.0 per cent down from 3.3 per cent in September 2019 and its recent peak of 5.6 per cent, observed in November 2018.

Overall inflation is projected to average 3.8 per cent in 2019.

The repo rate is the cost at which the central bank lends money to commercial banks and an increase or decrease in the rate is most likely to affect the interest rate that commercial banks charge consumers.

Source: Namibia Press Agency