Namibian central bank leaves key rate on hold

Namibia’s central bank kept its main lending rate unchanged on Wednesday, aiming to safeguard a currency peg to the South African rand and support growth.

The decision to hold the rate at 7.75% (NACBIR=ECI) is the second time in a row that the Bank of Namibia has held its key rate, after a 50 basis point (bps) hike in June and two 25 bps increases earlier in 2023.

“This policy stance will continue to safeguard the one-to-one link between the Namibia Dollar and the South African Rand, while supporting domestic economic activity, particularly the overstretched households and businesses,” central bank governor Johannes !Gawaxab said.

Inflation in the southern African country rose to 5.4% in September (NACPIY=ECI) from 4.7% in August, and the central bank said it forecast higher inflation this year before expecting it to slow down in 2024.

“The projected average inflation for 2023 has been revised upwards by 0.3 percentage point to 5.9% … mainly on the back of the recent surge in domestic fuel pump prices,” !Gawaxab added.

Inflation is seen at 4.8% for 2024.