Business Reporter
INTEREST rates on various loans and housing mortgages will remain unchanged after the Monetary Policy Committee (MPC) of the Bank of Namibia decided to keep the repo rate unchanged at 6.75%.
Similarly, the prime lending rate remains at 10.25%.
Ebson Uanguta said that this policy stance is deemed appropriate to support the stock of international reserves and safeguard the one-to-one link between the Namibia Dollar and the South African Rand.
“In determining the appropriate monetary policy stance, the MPC considered the need to close the interest rate gap between Namibia and the anchor country to stem capital outflows, alongside elevated inflationary pressures. However, the Committee opted to keep the repo rate steady, reflecting a balanced assessment of the subdued economic activity, a relatively benign inflation outlook and sufficient foreign exchange reserves,” Uanguta said.
Reflecting on the domestic economy, Uanguta said that economic activity moderated during the first half of 2026 relative to the corresponding period in 2025.
“Available high-frequency indicators suggest broad-based sluggish economic performance, especially in the mining, manufacturing, electricity generation, and transport sectors. Meanwhile, improved economic activity was noted in the agriculture and wholesale and retail trade sectors. Looking ahead, the growth outlook has been revised downward, with growth now forecast to recover from 1.7% in 2025 to 2.1% in 2026, 0.5 percentage point below the previous projections. The downward revision largely reflects contractions in the primary industries, alongside moderations in the secondary and tertiary industries. Downside risks to the outlook remain slower global growth, the Foot and Mouth Disease outbreak in neighbouring countries, and potential El Niño conditions,” Uanguta said.
He added that domestic inflationary pressures have remained elevated since the preceding MPC meeting.
“Accordingly, annual headline inflation rose to 4.4% in June 2026 from 4.1% in the preceding month, primarily driven by higher transport price inflation. Nevertheless, annual inflation averaged 3.2% during the first half of 2026, lower than the 3.6% recorded in the corresponding period of 2025, mainly due to lower food price inflation,” Uanguta said.
He stated that, on the external sector, Namibia’s merchandise trade deficit widened during the first half of 2026.
“Accordingly, the trade deficit worsened to N$19.3 billion during the first six months of 2026 from N$12.8 billion recorded in the same period in 2025. This was predominantly driven by elevated import payments, particularly for mineral fuels. Going forward, high import prices, alongside weakness in the diamond and gold subsectors, could weigh on the external position in the near term,” Uanguta said.
Photo: Bank of Namibia
