Bank of Namibia Governor Johannes !Gawaxab has defended Namibia’s continued currency peg with the South African rand, arguing that the arrangement supports contained inflation, regional alignment and broader monetary stability.
Speaking at his final monetary policy announcement, the Governor said the peg has consistently delivered low inflation and remains the most appropriate framework under current economic conditions.
“Our monetary policy has helped us to create macroeconomic stability. You can see this in the actual figures. South Africa has recently been targeting a 4.5% midpoint, and our currency, backed by that arrangement, has delivered 4.6%, which is very close to their target,” he said.
He emphasised that Namibia’s inflation performance since 2020 demonstrates the peg’s effectiveness, noting that the country has remained within the SADC inflation range while avoiding volatility experienced in other emerging markets.
“If you look at macroeconomic stability in the country, and the average inflation from June 2020, when I joined, until now, it is about 4.6%. Inflation is well contained, so you cannot argue against that. It is not a matter of opinion; it is factual,” he said.
!Gawaxab said the peg continues to anchor confidence and provide a stable environment for policy decisions. He added that any shift to an alternative exchange rate regime would only be feasible once Namibia’s economic conditions strengthen considerably.
“The current arrangement we have is the best arrangement for this country. We import low inflation, and we have macroeconomic stability on the back of a bigger brother,” he said.
