Central bank increases repo rate to 7.75%
The central bank’s Monetary Policy Committee (MPC) has decided to raise the repo rate by 50 basis to 7.75% with immediate effect.
According to the MPC announcement made on Wednesday by the Bank of Namibia Governor, Johannes !Gawaxab, the decision to increase the Repo rate by 50 basis points is deemed appropriate to safeguard the one-to-one link between the Namibia Dollar and the South African Rand.
“It is simultaneously aimed at further containing inflationary pressures, stemming their associated second-round effects, and anchoring inflation expectations,” he added.
The increase in the repo rate effectively brings the prime lending rate to 11.50% until the next meeting of the MPC on 14 and 15 August.
!Gawaxab meanwhile said domestic economic activity improved during the first four months of 2023.
“Inflation remained elevated but receded somewhat from its earlier peak, while the growth in Private Sector Credit Extension (PSCE) remained weak. The merchandise trade deficit narrowed and the stock of international reserves remained sufficient to support the currency peg and meet the country’s international financial obligations,” he said.
