WINDHOEK, 11 APR – The Bank of Namibia (BoN) has kept the repo rate unchanged at 6,75 per cent on Wednesday, saying it was concerned with the low level of foreign reserves.
The decision taken was supportive of economic growth and meant to safeguard the level of foreign reserves which had fallen to just 3.8 months’ worth of import cover, BoN Governor, Ipumbu Shiimi, said at a media briefing.
The repo rate is the cost at which the central bank lends money to commercial banks and any change in that rate is most likely to affect the interest rate that commercial banks charge consumers.
Speaking after the BoN’s second monetary policy meeting of the year on Tuesday, the governor said that annual inflation had averaged 3,6 per cent in the first two months of 2018, compared to 8,0 per cent last year.
During the briefing, Shiimi said the monetary policy stances in key economies remained accommodative during the first three months of 2018.
He reiterated that the local economy, which contracted by 0,8 per cent in 2017, was expected to start a gradual recovery with growth of 1,4 per cent this year. By comparison, the global economy was projected to grow by 3,9 per cent in 2018, on account of marginally higher growth in emerging markets and developing economies.
The most advance economies were projected to maintain the same growth rate of 2,3 per cent in 2018.