Staff Reporter
WINDHOEK, December 6 – Namibia’s central bank, the Bank of Namibia, has chosen to maintain its policy rate at 7.75%, demonstrating confidence in the anticipated slowdown in inflation and the persisting economic sluggishness.
This decision marks the third consecutive time the Bank has kept the rate steady, following two 25-basis-point increases earlier in the year and a more substantial 50-basis-point hike in June.
The Monetary Policy Committee, in its statement, acknowledged the recent uptick in inflation, which rose from 5.4% in September to 6.0% year-on-year in October. However, the committee remains optimistic that inflation will ease to 4.8% in 2024, aligning with its previous forecast.
This optimism is rooted in several factors, including:
1. Expected moderation in global commodity prices: Foreseen stability in global commodity prices is expected to exert downward pressure on domestic inflation.
2. Continued slack in the domestic economy: The Namibian economy is projected to remain subdued in the near term, mitigating inflationary pressures.
3. Slow credit growth: Credit growth continues to be relatively slow, limiting the potential for inflationary pressures to build.
While recognizing the recent uptick in inflation, the Bank believes it is temporary and largely influenced by external factors beyond its control. The committee maintains a vigilant stance on monitoring economic developments and stands ready to adjust its policy if necessary.
This decision aligns with the Bank’s commitment to maintaining price stability while supporting economic growth. It also mirrors the cautious approach adopted by central banks globally in response to prevailing uncertainties in the current global economic landscape.