The Bank of Namibia’s Monetary Policy Committee (MPC) is expected to keep the repo rate unchanged at 6.75% when it announces its fifth monetary policy decision of the year on Wednesday, 15 October 2025.
Simonis Storm junior economist Almandro Jansen said the decision is likely to reflect the central bank’s cautious stance amid a slight rise in inflation and the need to support economic growth.
“Given these dynamics, the Bank of Namibia is likely to maintain the repo rate at 6.75% at its next Monetary Policy Committee meeting. However, we do believe there is one more rate cut of 25 basis points in the pipeline before the end of 2025, balancing stable inflation with the need to support economic growth,” Jansen said.
He noted that Namibia’s headline inflation rose marginally to 3.5% year-on-year in September from 3.2% in August — the first increase in four months. While inflation remains within the Bank of Namibia’s 3–6% target range, Jansen said the uptick could mark a turning point in the disinflationary trend that began in late 2023.
Jansen added that Namibia’s monetary policy will remain closely aligned with South Africa’s due to the rand peg, which restricts the central bank’s ability to diverge significantly without risking destabilising capital flows. “The central bank currently holds a 25-basis-point spread against the South African Reserve Bank’s repo rate of 7.00%, reflecting slightly lower domestic inflation and the need to support local growth,” he said.
FNB Group economist Helena Mboti echoed similar expectations, noting that the repo rate has remained unchanged since August and is likely to stay at that level following this week’s MPC meeting.
“Namibia’s repo rate generally tracks the South African Reserve Bank to safeguard the currency peg, but domestic structural pressures, particularly the BoN’s reserve position, can shape the timing and extent of adjustments,” Mboti said.
She pointed out that past policy divergences, such as in 2023 when high reserves allowed the Bank of Namibia to keep rates up to 75 basis points below South Africa’s, show how favourable domestic conditions can enable short-term flexibility without jeopardising price or financial stability.
Mboti also warned of key risks to Namibia’s financial stability, including external shocks such as geopolitical tensions that could affect exchange rates and trade, as well as domestic factors like rising housing and food costs.
“Even if GDP growth and capital ratios remain sound, higher inflation relative to income growth could erode household affordability, making the balance between capital inflows and living costs a key challenge,” she said.
