- Decision
- Maintain
- Rate change
- 0 bps
- repo rate
- 6.5%
The Bank of Namibia’s Monetary Policy Committee left the repo rate unchanged at 6.50 % for the next two-month period, judging the stance appropriate to preserve the one-to-one Namibia dollar/South African rand peg while cushioning a slowing domestic economy amid subdued credit demand and contained inflation. After two 25 bp cuts in February and October 2025, which lowered the policy rate by a cumulative 50 bp, the committee saw no need for further adjustment. Commercial banks are expected to keep prime lending rates at 10.00 %. Average consumer inflation eased to 3.5 % in 2025 from 4.2 % in 2024 and fell further to 2.9 % in January 2026; it is projected at 3.5 % for 2026 and 3.4 % for 2027, with upside risks from administered prices, currency swings and geopolitics. Real GDP growth weakened through the first three quarters of 2025, while private-sector credit growth slowed to 4.4 % y/y in December from a 5.9 % peak in September. Externally, the 2025 merchandise trade deficit narrowed 35 % to NAD 25 bn and international reserves rebounded to NAD 51.9 bn in January, providing 3.3 months of import cover and supporting the peg. Globally, the IMF projects steady 3.3 % growth in 2026 as inflation eases, though commodity prices for gold, zinc, copper and uranium have firmed and oil has risen amid renewed geopolitical tensions. The committee signalled that previous easing and a normalised prime-repo spread already offer sufficient support, and it will review the stance again at its late-April meeting.
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.