WINDHOEK, Oct. 23 — Namibia‘s central bank has introduced new regulatory measures to strengthen the country’s financial stability and safeguard its banking sector from potential shocks amid a volatile global economic environment.
In its Financial Stability Report for October released on Wednesday, the Bank of Namibia said it had approved a countercyclical loan-to-value regulation to replace the existing fixed ratio, giving the central bank greater flexibility to respond to shifts in credit conditions.
The measure is expected to enhance the resilience of both banking and non-banking financial institutions against economic downturns, the bank said.
According to the report, Namibia‘s financial system remains sound and well-capitalized, with banks maintaining strong liquidity, profitability, and sufficient capital buffers.
Stress tests under adverse scenarios showed that domestic banks would remain solvent even amid worsening global conditions.
“The new macro-prudential framework enhances the country’s ability to pre-empt systemic risks and ensure credit growth remains sustainable,” the report noted.
The central bank also flagged rising global uncertainties, including trade tensions, geopolitical conflicts, and growing cyber threats, as factors warranting continued vigilance.
Despite subdued domestic growth, Namibia‘s financial sector continues to support economic activity, underpinned by a stable regulatory framework and robust payment infrastructure, it added. (Xinhua)
