The Bank of Namibia (BoN) has kept the repo rate unchanged at 6.50%, with Governor Johannes !Gawaxab saying inflation remains contained and economic growth has slowed.
The decision was announced on Wednesday, as !Gawaxab delivered his final monetary policy statement before stepping down at the end of the month.
!Gawaxab said the economic outlook for 2025 and 2026 remains stable, with several key sectors expected to support a medium-term recovery.
“Inflation for 2025 remains stable at 3.6%, while the 2026 outlook has been revised slightly down to 3.8% due to a stronger exchange rate and favourable oil price assumptions,” he said.
He noted that high-frequency indicators show the domestic economy continued to grow during the first ten months of 2025, though at a slower pace than the previous year. Contractions in manufacturing, diamond mining, livestock farming and transport prompted the central bank to revise its 2025 GDP forecast downward.
“Given subdued activity so far this year, real GDP growth is now projected to ease from 3.7% in 2024 to 3.0% in 2025, before recovering to 3.8% in 2026 and 4.3% in 2027,” !Gawaxab said.
The Governor added that maintaining the current monetary stance is necessary to safeguard the Namibia dollar’s peg to the South African rand while supporting domestic conditions. The prime lending rate remains unchanged at 10.125%.
“This policy stance is appropriate for safeguarding the one-to-one link with the rand and remains supportive of economic activity despite slowing momentum,” he said.
!Gawaxab warned that global uncertainty and South Africa’s adoption of a 3% inflation target require increased vigilance to protect local price and exchange-rate stability.
“The Committee noted global risks and stressed that South Africa’s new target demands greater vigilance in managing domestic inflation to ensure the smooth functioning of the peg,” he said.
He added that capital flows remain orderly and confirmed that the recent Eurobond redemption was completed smoothly.
The next Monetary Policy Committee meeting is scheduled for 16 and 17 February 2026.
