Central Bank increases repo rate to 4.25%
The Bank of Namibia has increased the interest rate by 25 basis points to 4.25% to counter the build-up of inflationary pressures in the economy.
This rate is now on par with the one set by the South African Reserve Bank. Bank of Namibia Governor Johannes !Gawaxab said the latest repo rate stance is appropriate to safeguard the one-to-one link between the Namibia Dollar and the South African Rand while meeting the country’s international financial obligations.
“This monetary policy stance is also a step towards normalising the current negative real interest rate environment and establishing a positive real interest rate that is conducive to long-term economic growth,” !Gawaxab said.
!Gawaxab said although most monitored central banks tightened their monetary policy stances, overall monetary policy stances remained generally accommodative.
Meanwhile, domestic inflationary pressures are building up as inflation averaged 4.5% during the first two months of 2022, compared to 2.7% in the corresponding period of 2021.
!Gawaxab said the rise in inflation was mainly driven by an increase in transport inflation, on account of a rise in international oil prices.