Repo rate remains unchanged at 7%
The Monetary Policy Committee (MPC) of the Bank of Namibia has decided to keep the Repo rate unchanged at 7%.
Governor of the Bank of Namibia, Ipumbu Shiimi on Wednesday said, “This rate remains appropriate to maintain the one-to-one link between the Namibia Dollar and the South African Rand, without compromising growth”.
At the announcement Shiimi said the country’s inflation rate slowed from 8.2% in January 2017 to reach 6.7 % in April 2017. The decline in the inflation rate was mainly due to lower food inflation, he said.
“Going forward, inflation is forecasted to average 6.9 % at the end of 2017,” he said and attributed the rise to consumption driven debt at both the household national level that is mostly financed by credit.
Meanwhile, the growth in Private Sector Credit Extension (PSCE) slowed during the first four months of 2017. The annual rate of PSCE slowed growth to 8.6% during the first four months of 2017 from 13% during the same period of 2016.
In terms of the country’s foreign reserves, Shiimi said as of 1 June, the preliminary stock of international reserves stood at N$24.2 billion, representing an increase both on a monthly and annual basis.
“The increase was largely a result of local institutional investors who decided to liquidate some of their foreign investment to invest in the domestic economy,” he said.
According to Shiimi, at this level, the stock of international reserves is estimated to cover 3.7 months of imports of goods and services, and thereby remains sufficient to sustain the currency peg between the Namibian Dollar and the South African Rand.