Central Bank cuts repo rate by another 25 basis points
The Monetary Policy Committee of the Bank of Namibia has cut the repo rate by 25 basis points, Governor Johannes !Gawaxab announced on 19 August.
The repo rate now standing at 3.75% from 4%, is in line with market expectation and translates to a cumulative 2.75% reduction in the repo rate since the beginning of 2020.
!Gawaxab said the decision for a further rate cut was made as the committee had to balance the need for further monetary stimulus in the face of the Covid-19 pandemic-induced weaknesses of the economy, against the importance not to undermine sound saving and investment decisions in the economy.
“The monetary policy committee also noted the efforts made to support economic activity and bridging the financing gaps left by the pandemic, and is confident that this will underpin a recovery of the Namibian economy,” he added.
The monetary policy committee is of the view that at 3.75%, the repo rate will at the same time safeguard the one-on-one link between the Namibia Dollar and the South African Rand. On 23 July, the South African Reserve Bank announced another 25-basis points repo rate cut, taking South Africa’s rate to a four-decade record low of 3.5% from the previous 3.75%.