The Bank of Namibia’s Monetary Policy Committee (MPC) has decided to keep the repo rate unchanged at 6.75 percent, following its fourth bi-monthly meeting of 2025 held on 11 and 12 August.
Governor Johannes !Gawaxab said the decision, taken unanimously, was aimed at “safeguarding the one-to-one link between the Namibia Dollar and the South African Rand, while supporting domestic economic activity.”
He added that commercial banks are expected to maintain their prime lending rates at 10.50 percent.
In line with a guidance note issued by the central bank in June, commercial banks are expected to reduce their prime lending rates by 12.5 basis points to 10.375 percent by the end of September.
“The normalisation in the prime-repo spread that is in the pipeline is expected to provide support for domestic economic activity and credit growth going forward,” !Gawaxab said.
He noted that maintaining the repo rate while the South African Reserve Bank cut its own rate in July was “a further step towards narrowing the interest differential between Namibia and South Africa.”
The Governor said the gap has been closing, with Namibia’s repo rate remaining 25 basis points lower than in the anchor country — a situation he described as “good for supporting domestic growth without jeopardising the stability of capital flows that has been observed to date.”
The MPC also acknowledged the South African Reserve Bank’s recent move to lower its preferred inflation rate to 3.0 percent from 4.5 percent.
“The Committee welcomes and recognises the positive policy development associated with this stance to promote price stability and strengthen monetary policy transmission,” !Gawaxab said.
The next MPC meeting will be held on 13 and 14 October 2025.
