- Decision
- Maintain
- Rate change
- 0 bps
- repo rate
- 6.75%
The Bank of Namibia’s Monetary Policy Committee kept the repo rate unchanged at 6.75 percent following its 16–17 June meeting, citing the need to protect the Namibia dollar’s peg to the South African rand while supporting a domestic expansion that has moderated and amid “well-contained” inflation. After a 25 bp cut in February, the rate has been held steady in both April and June. The committee said the current stance maintains adequate liquidity and underpins the peg, supported by international reserves that remain sufficient despite a still-high—though somewhat narrower—merchandise trade deficit. Economic activity in the first four months of 2025 was led by mining, tourism, wholesale and retail trade, transport and communication, offset by weakness in construction, agriculture and diamond mining; real GDP is projected to gain slightly to 3.8 percent in 2025 and 4.0 percent in 2026, with risks from tariff restrictions, prolonged policy uncertainty, depressed diamond prices and escalating geopolitical tensions, including the Israel-Iran conflict. Private-sector credit extension continues to edge higher but is deemed subdued. The MPC said it will keep monitoring domestic, regional and global developments ahead of its next decision.
Rate evolution
From June 2025 to April 2026, the Bank of Namibia eased the Repo rate by 25 basis points to 6.50 percent after holding it at 6.75 percent through mid-2025, then paused at the lower level. Early holds were aimed at safeguarding the peg with the South African Rand while supporting slower growth, with inflation subdued, reserves adequate and credit weak, amid downside risks from trade policy shifts, weak diamond prices, geopolitical tensions and supply constraints. The October cut reflected weaker activity and lower inflation, and the view that a high real Repo rate, adequate reserves and orderly flows gave room to support growth despite concern about a wider rate gap with South Africa.
The Monetary Policy Committee then kept the Repo rate at 6.50 percent through April 2026, arguing that weak activity and credit warranted support but that peg management, South Africa’s lower inflation target and the Middle East-driven energy shock required vigilance as inflation was projected to rise in 2026 before moderating. On 17 June 2026, the Bank of Namibia raised the Repo rate by 25 basis points to 6.75 percent, citing rising global and domestic inflationary pressures, an upward revision to the inflation outlook and the need to mitigate second-round effects of the energy shock, support international reserves and safeguard the one-to-one link between the Namibia Dollar and the South African Rand, even as domestic activity remained weak and private sector credit extension subdued. On 12 August 2026, it held the Repo rate at 6.75 percent, balancing subdued economic activity, a relatively benign inflation outlook and sufficient foreign exchange reserves against elevated inflationary pressures and the need to close the interest rate gap with the anchor country to stem capital outflows.