- Decision
- Maintain
- Rate change
- 0 bps
- Policy rate after decision
- 6.75%
The Bank of Namibia’s Monetary Policy Committee unanimously held the Repo rate at 6.75 percent for the next two months, balancing subdued economic activity, a relatively benign inflation outlook and sufficient foreign reserves against elevated inflation pressures and the need to safeguard the currency peg and stem capital outflows. Over the past year, the central bank cut the rate by 25 basis points to 6.50 percent in October 2025, held it through April 2026 and reversed the cut in June. The Prime lending rate remains 10.25 percent. Headline inflation rose to 4.4 percent in June, while 2026 inflation is projected at 4.0 percent and growth at 2.1 percent after a downward revision, with Private Sector Credit Extension growth slowing to 4.5 percent. International reserves rose to NAD 57.1 billion at end-July, equivalent to 3.5 months of import cover and sufficient to support the one-to-one link between the Namibia Dollar and South African Rand, although the merchandise trade deficit widened. Globally, activity moderated as elevated oil prices and renewed Middle East tensions sustained inflationary and downside growth risks.
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.