Africa-Press – Namibia. THE Bank of Namibia has cut lending rates after its Monetary Policy Committee (MPC) announced that it has decided to reduce the Repo rate by 25 basis points to 6.50%.
Johannes !Gawaxab, Governor of the central bank, said that in determining the appropriate monetary policy stance, the committee considered the weaker domestic economic activity, well-contained inflation, and a favourable medium-term inflation outlook.
“Year-to-date capital outflows were assessed to be orderly. The relatively high real Repo rate and adequate foreign reserves were also deemed to be supportive of a reduction in the nominal Repo rate. 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 (South Africa) but was of the view that its magnitude falls within the boundaries where capital movements remain well-contained. Moreover, while there is imminent pressure on foreign reserves due to the forthcoming Eurobond redemption, thorough preparation in anticipation of this event has ensured that Namibia’s foreign reserve adequacy is not jeopardized,” !Gawaxab said.
He added that, against this background, the MPC decided to reduce the Repo rate by 25 basis points to 6.50%. Commercial banks are accordingly expected to cut their prime lending rates by the same margin to 10.125 percent. This policy stance will continue to support domestic economic activity while safeguarding the one-to-one link between the Namibia Dollar and the South African Rand.
Giving an update on the local economy, !Gawaxab said that real GDP growth has surprised on the downside, falling to a post-pandemic low of 1.6% year-on-year in the second quarter of 2025, down from 3.3% during the corresponding period of 2024.
“This poor performance was primarily observed in the manufacturing, fishing, and agriculture sectors. High-frequency indicators further corroborate this trend, suggesting that the pace of expansion in economic activity during the first eight months of 2025 has slowed compared to the same period in 2024. Looking ahead, real GDP growth for 2025 is projected to decline from the 3.7% registered in 2024, with downside risks now more pronounced,” !Gawaxab said.
He added that annual inflation remains contained, averaging 3.6% during the first eight months of 2025, compared to 4.6% during the same period in 2024.
“This disinflation was primarily reflected in the categories of housing and alcoholic beverages, augmented by deflation in the transport category. Moreover, consumer price inflation has remained unchanged at 3.5% in September 2025 relative to its level in July 2025, although it temporarily dipped to 3.2% in August,” !Gawaxab said.
For More News And Analysis About Namibia Follow Africa-Press
