The Bank of Namibia (BoN) has kept the repo rate unchanged at 6.50%, with Governor Ebson Uanguta citing low inflation, subdued private sector credit uptake, an improved trade balance and adequate international reserves as key factors supporting the decision.
The Monetary Policy Committee (MPC), which met on 16 and 17 February 2026, unanimously resolved to maintain the current policy stance in order to safeguard the one-to-one peg between the Namibia Dollar and the South African Rand, while remaining supportive of domestic economic activity.
Uanguta said domestic inflation remained well contained, averaging 3.5% in 2025 compared to 4.2% in 2024, and easing further to 2.9% in January 2026.
“Inflation is projected to remain steady at 3.5% in 2026 before moderating slightly in 2027. Domestic inflation remains well contained and is projected to stay within comfortable levels over the medium term, supported by lower oil and food price assumptions and a stronger currency, although upside risks remain,” Uanguta said during his maiden monetary policy announcement.
He noted that economic activity slowed during the first three quarters of 2025, with contractions recorded in agriculture, fishing, mining and manufacturing.
“High-frequency indicators point to subdued growth relative to 2024, and overall output for 2025 is now estimated to be lower than previously projected,” he said.
Private Sector Credit Extension (PSCE) growth also moderated, easing from 5.9% in September 2025 to 4.4% in December. Although the average annual growth rate improved to 4.9% in 2025 from 2.5% in 2024, Uanguta said credit uptake by businesses and households remains subdued.
Namibia’s external position strengthened during 2025, with the merchandise trade deficit narrowing by 35.4% to N$25.0 billion, supported by higher export volumes and strong commodity prices, particularly uranium and gold.
International reserves improved following the redemption of the US$750 million Eurobond, rising to N$51.9 billion at the end of January 2026, equivalent to 3.3 months of import cover.
“At this level, foreign reserves are sufficient to support the currency peg and meet the country’s international financial obligations, which remains a central consideration in our policy decisions,” Uanguta said.
He added that while weaker domestic activity and benign inflation projections were considered, the MPC balanced these factors against the need to ensure orderly capital flows and preserve the currency peg arrangement.
Commercial banks are expected to maintain the prime lending rate at 10.00%. The next MPC meeting is scheduled for 27 and 28 April 2026.
