The Bank of Namibia (BoN) on Wednesday announced an immediate increase to the repo rate by 50 basis points.

The increased repo rate now translates into lending rates of money by the central bank of Namibia to the local commercial banks from 6.25 per cent to 6.75 per cent.

In a media statement on Wednesday, BoN said the decision to increase the repo rate was necessitated by the inflation pressure.

The decision was taken at the meetings held in the capital on Monday and Tuesday by the country’s Monetary Policy Committee (MPC) which is the arm of the Bank of Namibia, said the statement.

“Thus to continue anchoring inflation expectations and safeguarding the [Rand] peg arrangement, the MPC unanimously decided to increase the repo rate by 50 basis points to 6.75 per cent. This decision is with immediate effects,” said the central bank.

Other contributing factors to increase, include the comprehensive review of global, regional and domestic economic developments.

Consequently, the MPC was also mindful of the need to strike a balance between anchoring the inflation expectations and supporting domestic economic recovery.

The bank’s MPC will meet again after two months, the statement read.

Source: The Namibian Press Agency