Central Bank cuts repo rate by another 100 basis points
The Bank of Namibia on Wednesday decided to reduce the repo rate by 100 basis points to 4.25% from an earlier 5.25% decided on 20 March.
Interim governor of the Bank, Ebson Uanguta made the announcement a day after the South African Reserve Bank reduced their repo rate.
Uanguta said the decision was made to support weak domestic economic activity and provide short-term relief amid the extraordinary circumstances arising from the Covid-19 pandemic, while keeping the one to one link between the Namibia Dollar and the South African Rand.
According to Uanguta, domestic economic activity slowed during the first three months of 2020, while the inflation rate declined, and the growth in Private Sector Credit Extension remained subdued. The stock of international reserves remained sufficient to support the currency peg.
Uanguta said since its last extraordinary monetary policy committee meeting, the Bank has noted positive developments aimed at cushioning the economy from the effects of the pandemic.
“The Bank, in its role as the regulator of commercial banks, has undertaken policy and regulatory changes to allow commercial banks the necessary space to help individuals and businesses during this extraordinary time,” Uanguta said.
These efforts together with government’s recently announced stimulus package are believed to help mitigate the impact of Covid-19 on vulnerable sectors, people’s livelihood and on the economy.