Namibia Has Room to Cut Interest Rates, International Monetary Fund Says

Namibia’s central bank has room to lower borrowing costs, the International Monetary Fund said in a staff report on the country’s economy.

“Staff believes that there is scope for reducing domestic interest rates by bringing the policy rate in line with South Africa,” the IMF board said in a statement released today that followed a July 23 discussion on the staff report.

Namibia’s currency is pegged to the South African rand, and the central bank generally follows monetary policy set by its neighbor, Africa’s biggest economy. Since April 2010, it has kept its benchmark rate 50 basis points above that of South Africa. Namibia left the rate unchanged today for a seventh consecutive meeting.

The IMF expects Namibia, the world’s largest producer of offshore diamonds, to grow 4.4 percent this year and warned that the outlook “is subject to downside risks stemming from uncertain global economic recovery.”

To contact the reporter on this story: Sandrine Rastello in Washington at srastello@bloomberg.net;

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