Central Bank maintains interest rate unchanged at 6.5%
The Bank of Namibia decided to keep the repo rate unchanged at 6.5%, in order to continue
supporting domestic economic activities and to maintain the one-to-one link between the Namibia Dollar and the South African Rand.
Bank of Namibia Governor, Iipumbu Shiimi made the announcement on Wednesday, adding that the domestic economic activity continued to slow during the first eight months of 2019, compared to the corresponding period of 2018.
“The slowdown was reflected in sectors such as mining, construction, wholesale and retail trade and agriculture. On the contrary, the manufacturing sector improved during the same period. Going forward, the domestic economy is projected to remain weak in 2019,” Shiimi said.
Shiimi further said that the inflation rate declined further to an average of 4.1% during the first nine months of 2019, down from its recent peak of 5.6% observed in November 2018. The inflation rate declined to 3.3% in September 2019, from 3.7% in August 2019. Overall inflation is projected to average 3.9 percent in 2019.
As at the 30 of September 2019, the stock of international reserves stood at N$32.3 billion, compared to N$35.2 billion seen in August. This amount of international reserves is estimated to cover 4.3 months of imports of goods and services.
“At this level, the reserves are sufficient to protect the peg of the Namibia Dollar to the South African Rand and meet the country’s international financial obligations,” Shiimi said.
According to Shiimi, the global economic growth slowed during the second quarter of 2019, mainly due to lower growth observed in the Advanced Economies, except for Japan. Going forward, he projected growth in the global economy to slow down further to 3% in 2019 before recovering to 3.4% in 2020.