Bank of Namibia holds repo rate at 6.75% amid lowered growth outlook

The Bank of Namibia has maintained its repo rate at 6.75%, keeping the prime lending rate at 10.25%. Governor Ebson Uanguta stated the decision was intended to support international reserves and safeguard the one-to-one currency peg between the Namibian dollar and the South African rand.

The central bank lowered its 2026 economic growth forecast to 2.1% from a previous 2.6%. This downward revision follows subdued economic activity during the first half of the year, specifically within the mining, manufacturing, electricity generation, and transport sectors. These declines were partially offset by performance in agriculture and the wholesale and retail trade sectors.

Inflation rose to 4.4% in June, primarily driven by increased transport costs. While inflation averaged 3.2% during the first half of the year, the central bank expects it to average 4.0% in 2026. Additionally, Namibia’s merchandise trade deficit widened to N$19.3 billion in the first half of the year, largely due to mineral fuel imports.