Namibia Central Bank Holds Benchmark Rate at 5.5%

Namibia’s central bank left its benchmark interest rate unchanged for a sixth consecutive meeting, after the inflation (NCPIYOY) rate fell to the lowest level in about a year.

The repurchase rate was left at 5.5 percent, Deputy Governor Ebson Uanguta told reporters in Windhoek. The bank last lowered the rate by half a point in August 2012.

“Inflation is going to remain stable,” Uanguta said. “Going forward, it’s going to remain within acceptable levels.”

Inflation slowed to 5.8 percent in July from 6.2 percent a month earlier, giving policy makers room to keep borrowing costs unchanged to support the economy as demand for exports of diamonds and manufactured goods eased. Namibia is the world’s biggest miner of offshore diamonds and the fourth-largest producer of uranium.

The inflation rate will probably average 6.1 percent this year, while economic growth is set to moderate to 4.7 percent from 5 percent in 2012, Uanguta said. The International Monetary Fund forecasts expansion of 4.2 percent in 2013.

“Some uncertainties in diamond and uranium production are expected to exert a drag on mining sector growth,” Uanguta said.

The Namibian dollar is pegged to the South African rand, and the Bank of Namibia’s monetary policy decisions are usually in line with those of the South African Reserve Bank, which held its repurchase rate at 5 percent last month.

To contact the reporter on this story: Felix Njini in Windhoek at fnjini@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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