WINDHOEK (Reuters) -Namibia’s central bank cut its main interest rate by 25 basis points to 6.50% on Wednesday, saying that the domestic economy had weakened and that inflation was well-contained.
The Bank of Namibia had previously kept its lending rate unchanged for three monetary policy meetings in a row.
It said the cut was intended to support domestic economic activity while safeguarding the peg between the local currency and the South African rand. Neighbouring South Africa held its repo rate at 7% last month.
“The MPC was wary that a lowering of the repo rate would widen the gap between the domestic policy rate and that of the anchor country but was of the view that its magnitude falls within the boundaries where capital movements remain well-contained,” Governor Johannes !Gawaxab told a press conference.
Inflation in Namibia rose to 3.5% year-on-year in September from 3.2% in August.
The central bank lowered its inflation projections for both 2025 and 2026 by 0.2 percentage points to 3.6% and 4.0%, respectively, it said in its monetary policy statement, citing a downward revision to the oil price outlook.
It maintained its 2025 GDP growth forecast at 3.5% and its 2026 forecast at 3.9%.
(Additional reporting by Anathi MadubelaWriting by Sfundo ParakozovEditing by Nellie Peyton and Peter Graff)
