Namibia’s Central Bank Keeps Benchmark Rate Unchanged

Namibia’s central bank kept its benchmark interest rate unchanged for a third consecutive meeting as inflation accelerated.

The repurchase rate was left at 5.5 percent, Deputy Governor Ebson Uanguta told reporters in the capital, Windhoek, today. Namibia is the world’s largest producer of offshore diamonds and the fourth-biggest miner of uranium.

Inflation quickened to 6.6 percent in January from 6.3 percent in the previous month, restricting the central bank’s ability to stimulate the economy as demand for diamonds and other mining exports waned. The bank reduced the key lending rate by half a percentage point in August.

Economic growth will probably slow to 4.4 percent this year from 4.6 percent in 2012, Uanguta said. Lower demand for diamonds will probably curb growth in mining output to 3.8 percent in 2013 from 17.1 percent last year, he said.

The Namibian dollar is pegged to the South African rand and the Bank of Namibia generally follows interest rate decisions set by policy makers in the neighboring country. The South African Reserve Bank has held its benchmark repurchase rate at 5 percent since a surprise cut in July.

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