THE Bank of Namibia has announced that its Monetary Policy Committee (MPC) has cut the repo rate by 25 basis points to 6.25%.
The Bank of Namibia’s governor, Ipumbu Shiimi stated that that the MPC took the decision to support domestic economic activity and to maintain the one-to-one link between the Namibia dollar and the South African rand.
At its previous monetary policy meeting held 4 December 2019, the Bank of Namibia Governor left the repo rate unchanged at 6.50%.
Ipumbu explained that although the cut in the repo rate will lower the interest rates at which the central bank will lend out money to commercial banks, one cannot just rely on one instrument to stimulate economic growth.
“Interest rates right now are not the issue as it’s remained relatively low, however other economic activities need to take place to bolster economic growth. Household debt has already over-extended itself. Other reforms are needed for private sector investments, and international investments to stimulate growth,” Ipumbu said.