WINDHOEK, Oct. 28 — Namibia’s central bank on Wednesday raised its repo rate by 25 basis points to 7 percent to safeguard the Namibian dollar’s one-to-one link with the South African rand and contain inflation.
Announcing the decision in Windhoek, Bank of Namibia Governor Ebson Uanguta said the increase would help mitigate the second-round effects of higher fuel prices and narrow the interest rate gap with South Africa to curb potential capital outflows and safeguard foreign reserves.
Namibia’s inflation rate rose to 5.4 percent year on year in September from 4.4 percent in June, largely driven by higher transport prices, the bank said. Headline inflation is projected to rise to 4.2 percent in 2026 from 3.5 percent in 2025, before easing to 4.0 percent in 2027.
The bank said it had revised its forecasts upward, mainly reflecting expectations of a prolonged global energy price shock. The economy is expected to grow by 2.1 percent in 2026 and 2.8 percent in 2027, following growth of 1.7 percent in 2025.
However, the outlook remains vulnerable to subdued global growth, an outbreak of foot-and-mouth disease and potential El Nino conditions, the bank said.
International reserves increased to 59.3 billion Namibian dollars (about 3.6 billion U.S. dollars) at the end of September from 58.0 billion Namibian dollars at the end of July, providing an estimated 3.6 months of import cover.
The reserves remained sufficient to support the currency peg and meet the country’s international financial obligations, the bank said. (Namibia Daily News / Xinhua)
