Interest rates remain unchanged
The Bank of Namibia (BoN) has left interest rates unchanged since August 2012 despite concerns of growing private sector credit growth.
This week the Governor of the central bank announced that the repo rate, the rate at which the central bank lends money to commercial banks, will for the 16th month in a row remain unchanged at 5.5% despite the growth of credit expansion to individuals which has remained high.
Since the 50 basis points rate cut on 22 August 2012, the BoN has left the repo rate at 5.5%, the lowest level since Independence in 1990.
Governor Ipumbu Shiimi said the bank revised downwards its economic growth projection for 2013 from 4.7% to 4% amid a fragile global environment. The downward revision was mainly on account of weak primary sector activities, particularly agriculture, due to the current drought conditions in the country.
On the other hand, the bank said the construction sector is estimated to have performed well in 2013, due to brisk economic activity in public works and large on-going mining investments. In addition, wholesale and retail trade experienced increase sales on account of tax relief and the civil service salary re-grading.
Annual inflation continued to slow down in October to 4.9%. It is expected to remain low for the remainder of the year. The drop in inflation was attributed to low inflation rates for food and non-alcoholic beverages and alcoholic beverages and tobacco, while transport and housing inflation increased slightly.