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Bank of Namibia maintains repo rate

Ipumbu Shiimi, Governor of the Bank of Namibia

The Bank of Namibia this week announced that it will leave the repo rate unchanged. This follows a similar stance witnessed in South Africa when the South African Reserve Bank announced no change to its repo rate.

The Governor of the Bank of Namibia, Ipumbu Shiimi said, “developments in the domestic economy point towards an improved growth during the first two months of 2015 with inflation continuing to decline.”
Improvements in the domestic economy during the first two months was mainly driven by robust public and private construction activities, coupled with strong sales in wholesale and retail trade Shiimi explained with annual growth expected to close at 5.6% for the year.
The annual inflation rate slowed to 3.6% at the end of February 2015, mainly reflected in the lower inflation rates for transport, housing, water, electricity, gas and other fuels. Shiimi explained that overall inflation was expected to remain stable. “The monetary policy stances remained supportive of growth in most countries, amid a low inflation environment,” Shiimi added.
While the low inflation environment was welcomed, Shiimi spoke worringly of a sharp rise in instalment credit extended toward households.
“Of concern to the Monetary Policy Committee remains the high growth rate for instalment credit extended to households which grew 18.7% on average over the last six months.”
Total private credit extended to the private sector continued to grow strongly in February. Shiimi spoke with an air of relief saying, “this was mainly driven by increased demand for credit demand for credit by businesses.
Private Sector Credit Extension expanded by an average of 16.2% during the previous six months.

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