The Bank of Namibia has decided to maintain its main interest rate at 7.75% due to a recent increase in inflation and to support the peg of the local currency to the South African rand.
Since June 2023, the rate has been held steady at this level. Consumer inflation has shown a slight increase, reaching 4.9% in May, up from 4.8% in April and 4.5% in March.
Governor Johannes !Gawaxab highlighted the Monetary Policy Committee’s (MPC) concerns about the recent inflationary trends, noting the importance of continuing efforts to manage inflation and ensure price stability.
He noted that risks to the domestic economic outlook continue due to factors such as drought and declining diamond prices on the international market.
As a major diamond producer, Namibia also possesses significant deposits of lithium and rare earth minerals used in electric vehicles and wind turbines.
The central bank anticipates inflation will average 4.9% this year, consistent with its forecast from the last MPC meeting in April.
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