Namibia Maintains Interest Rates to Support Economic Stability
Bank of Namibia maintains interest rates steady for third consecutive meeting, balancing currency peg protection with economic growth support amid revised inflation and GDP forecasts.
Bank of Namibia headquarters in Windhoek, where key monetary policy decisions are made
The Bank of Namibia has maintained its main interest rate unchanged for the third consecutive policy meeting, demonstrating a strategic balance between economic growth and monetary stability. This decision comes as the central bank aims to protect its currency peg with the South African rand while fostering domestic economic development.
Strategic Rate Decision and Economic Implications
Bank of Namibia Governor Johannes !Gawaxab emphasized that keeping the repo rate steady, despite South Africa's recent 25 basis point reduction, represents a calculated move to narrow the interest differential between the two nations. This decision aligns with Namibia's ongoing efforts to modernize its financial system while maintaining economic stability.
Inflation and Growth Projections
The central bank has adjusted its economic outlook, revealing:
- Inflation forecasts reduced to 3.8% for 2025 and 4.2% for 2026
- Current inflation rate standing at 3.5% in July
- GDP growth projection revised to 3.5% for 2025, down from 3.8%
- 2026 growth forecast adjusted to 3.9%, previously 4.0%
Sector Challenges and Financial Integration
The revised growth forecasts reflect challenges in key sectors including agriculture, mining, and manufacturing. This economic landscape has prompted renewed focus on financial integration initiatives to boost economic resilience.
These developments come as Namibia's financial sector undergoes significant transformation, with the central bank actively working to balance international financial relations while protecting domestic economic interests.
"Maintaining the repo rate unchanged was a further step towards narrowing the interest differential between Namibia and South Africa," stated Governor !Gawaxab.
Jasmine Demraoui
Journalist in governance and climate reform, based in Windhoek.