Namibia Cuts Interest Rates Again Amid Economic Growth Plans. Namibia’s central bank has reduced its benchmark interest rate for the fourth consecutive time, citing stable inflation and the need to boost economic growth. The Bank of Namibia lowered its repo rate by 25 basis points to 6.75%, continuing its trend of gradual rate cuts over recent monetary policy meetings.
The decision comes as inflation in Namibia shows signs of stability. The annual inflation rate dropped to 3.2% in January, down from 3.4% in December. The central bank projects an average inflation rate of 4.0% for the year, indicating a manageable price environment.
Officials also pointed to favorable domestic real interest rates and sufficient foreign currency reserves as factors supporting the rate adjustment. Despite global economic uncertainties, the bank expects Namibia’s economy to expand by 4.0% in 2025, up from 3.5% last year. However, concerns over rising trade restrictions globally could pose risks to this outlook.
Bank of Namibia Governor Johannes !Gawaxab highlighted the importance of monitoring global trade tensions and their potential impact on Namibia’s economy. Given the country’s strong economic ties with South Africa and the fixed exchange rate between the Namibian dollar and the South African rand, external developments remain a key consideration.
Recent geopolitical events, including U.S. policy changes affecting South Africa, could also influence Namibia’s economic landscape. U.S. President Donald Trump recently signed an executive order reducing financial assistance to South Africa, citing concerns over its land policies and a legal dispute involving Israel. South Africa has strongly opposed the decision, arguing that it misrepresents historical and political realities.
As Namibia navigates these economic and geopolitical shifts, the central bank remains committed to policies that balance stability with growth, ensuring a resilient financial environment for the country’s future.