By Nyasha Nyaungwa
WINDHOEK (Reuters) – Namibia’s central bank cut its main interest rate for the second straight time on Wednesday, citing a rapid drop in inflation and the need to support the economy.
The Monetary Policy Committee (MPC) unanimously lowered the repo rate by 25 basis points to 7.25%, matching the cut made in August.
Bank of Namibia Governor Johannes !Gawaxab stated that the MPC recognized the global trend of easing monetary policy and the decrease in local inflation, especially with new data from September.
Inflation fell to 3.4% in September, down from 4.4% in August. The bank also lowered its average inflation forecast for the year to 4.3%, from 4.7%.
This revision is due to better expectations for international oil prices and a stronger local currency.
The bank noted that private sector lending is low, indicating a need for more economic support.
“The economy is growing moderately but isn’t at full capacity,” said !Gawaxab.
Growth is expected to slow to 3.1% in 2024, down from 4.2% in 2023.
Regarding a $750 million Eurobond due in late 2025, !Gawaxab mentioned Namibia has set aside 82% of the $500 million needed for repayment. The government aims to refinance the remaining $250 million.
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