The Bank of Namibia’s Monetary Policy Committee (MPC) unanimously raised the repo rate by 25 basis points to 7.00% for the next two months to safeguard the Namibia Dollar’s peg to the South African Rand and limit second-round effects from high fuel prices, despite subdued domestic activity. The move followed a 25-basis-point increase to 6.75% in June 2026 and an August hold. Annual inflation accelerated to 5.4% in September, primarily reflecting higher transport inflation, while the central bank raised its inflation forecasts on assumptions of a prolonged energy price shock. Economic growth is projected at 2.1% in 2026, supported by recoveries in agriculture and manufacturing but constrained by risks including the Foot and Mouth Disease outbreak. Private-sector credit growth picked up, reflecting increased borrowing by businesses and households. International reserves rose and remained sufficient to support the currency peg and meet international financial obligations. Globally, Middle East tensions drove oil prices higher, intensifying inflation and prompting tighter monetary policy across key economies. The MPC also stressed the need to narrow the interest-rate gap with South Africa to stem potential capital outflows and safeguard reserves.
Bank of Namibia Raises Repo Rate by 25 Basis Points to 7.00%
The Bank of Namibia’s Monetary Policy Committee unanimously raised the repo rate by 25 basis points to 7.00% for the next two months to safeguard the currency peg with South Africa and limit second-round effects from higher fuel prices. Annual inflation rose to 5.4% in September, while economic growth is projected at 2.1% in 2026.