Namibia central bank holds repo rate to safeguard rand peg
By Nyasha Nyaungwa
WINDHOEK, June 18 (Reuters) - Namibia's central bank left its main interest rate unchanged on Wednesday, saying it wanted to safeguard the local currency's peg to South Africa's rand and that global risks were limiting its ability to ease policy.
It was the second meeting in a row where the bank has kept its repo rate at 6.75% NACBIR=ECI after four rate cuts before that.
Global central banks are trying to prop up their economies through rate cuts in the face of risks linked to U.S. President Donald Trump's trade war and global conflicts.
"The MPC (Monetary Policy Committee) was wary of the prevailing uncertainty from fundamental global economic and trade policy shifts," the Bank of Namibia said in a statement.
"The escalating Middle East conflict and its potential ramifications for global inflation and growth could not be overlooked."
The central banks of Namibia and neighbouring South Africa often move in lockstep given the 1:1 peg between the Namibian dollar and the rand ZAR=D3.
But after South Africa cut rates by 25 basis points to 7.25% last month Namibia said on Wednesday that it wanted to reduce the interest rate differential between the two countries in the interest of orderly capital flows.
Namibia's international reserves are sufficient to cover about 3.7 months of imports, the central bank said.
It expects real economic growth to marginally improve to 3.8% in 2025 and 4.0% in 2026, from an estimated 3.7% last year.
The bank lowered its inflation projections for 2025 and 2026 to 3.9% and 4.3% respectively, reflecting a smaller-than-anticipated rise in administered prices and a stronger exchange rate. Inflation stood at 3.5% in May versus 3.6% in April NACPIY=ECI.
Related Articles
What hurdles lie ahead for any US-China TikTok deal?
By David Shepardson WASHINGTON, Sept 15 (Reuters) - Questions and potential hurdles surround a framework agreement announced on Monday between the U.S. and China that would switch short-video app TikTok to U.S.-controlled ownership, including whether any deal will comply with a 2024 law. U.S. and
September Fed Watch: A Policy Pivot That Could Make or Break the Bull Stock Market
TradingKey - The Fed’s September FOMC meeting is widely seen as locking in the first rate cut of 2025. Yet strategists at Morgan Stanley, JPMorgan, and Oppenheimer warn that as investors shift focus to slowing growth, a more cautious tone may replace bullish stock sentiment.
Effects of Interest Rate Cuts: Impact of Fed's September Meeting on Crypto Market
The Fed’s rate cut decision is a major bullish catalyst for crypto — but it comes with uncertainty. Investors should understand the economic rationale behind the move and adjust strategies accordingly. Staying flexible, informed, and disciplined is key to thriving in crypto’s fast-moving environment
Duolingo (DUOL): Can the Green Bird Fly High Again
TradingKey - Duolingo is a great business, despite the stock price being down nearly 50% from its peak less than four months ago. However, the question is whether it’s worth buying it at a market cap of $12.5 billion. The answer is “not yet” because the traffic, even though healthy...
Fed to Cut Rates: All Asset Prices Up!
TradingKey - The Federal Reserve is almost certain to restart its interest rate cut cycle on 17 September this year. After in-depth research, we have concluded that cryptocurrencies, the broader U.S. stock market, and short-term U.S. Treasury bonds will all go up.
