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Central Bank maintains Repo rate at 6.75%

Central Bank maintains Repo rate at 6.75%

In order to maintain the one-to-one link between the Namibia Dollar and the South African Rand, while supporting domestic economic growth, the Monetary Policy Committee of the Bank of Namibia left the Repo rate unchanged at 6.75%.

Governor of the Bank of Namibia, Iipumbu Shiimi, announced this at a press conference this week, following a committee meeting on 23 October.

Shiimi highlighted that the local economy remained weak during the first eight months of 2018, while the global economy has improved during the second quarter of 2018.

“Activity in sectors such as agriculture and wholesale & retail trade continued to decline over this period. Some improvements were, however, visible in the mining, transport and communication sectors. Overall, growth in the domestic economy is expected to remain low in 2018,” Shiimi said.

Meanwhile, inflation remained low, but started increasing in recent months. Shiimi said that annual inflation fell to an average of 4% during the first nine months of the year from 6.5% in the corresponding period of 2017, but started increasing from April 2018, due to rising fuel prices.

Moreover, Shiimi noted that credit extended to the private sector slowed during the first eight months of 2018 compared to the same period in 2017, with its annual growth rate standing at 5.6%, lower than the 7.4% recorded over the same period in 2017.

“The slower growth in private sector credit extension was due to reduced demand for credit by both the household and corporate sectors, especially for mortgage, overdraft, and installment credit,” Shiimi explained.

Furthermore, as of 30 September, the stock of international reserves stood at N$32.5 billion, down from the N$32.6 billion recorded in the previous monetary policy committee meeting. Shiimi said that at this rate, the stock of international reserves is estimated to cover 5.2 months of imported goods and services.

Shiimi announced that the next monetary policy committee meeting is scheduled for 4 December.

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