Bank of Namibia raises repo rate to 7% to combat inflation

The Bank of Namibia has increased its benchmark repo rate by 25 basis points to 7.00%. The decision, made unanimously by the Monetary Policy Committee, aims to contain inflationary pressures driven by rising energy costs and to protect the Namibian dollar’s one-to-one peg with the South African rand.

Annual inflation rose to 5.4% in September 2026, up from 4.4% in June, largely due to increased transport costs following a surge in global oil prices. The move also seeks to maintain a 25-basis-point interest rate differential with South Africa to prevent capital outflows.

The rate hike will impact domestic borrowers. For a typical N$1 million home loan, annual repayments are expected to increase by approximately N$4,000 since the current hiking cycle began. The commercial banks’ prime lending rate has reached 10.50%.

Economic pressures are further compounded by a merchandise trade deficit of N$33.5 billion recorded between January and August 2026. Additionally, households are facing rising costs from electricity tariff increases and higher petrol prices.