The Bank of Namibia has kept its benchmark interest rate unchanged at 6.75%, maintaining a cautious monetary policy stance after raising borrowing costs at its previous meeting.
The decision leaves the repo rate at its highest level since the central bank began its recent rate-cutting cycle.
Policymakers had increased it by 25 basis points in June. That was the first rate hike by the Bank of Namibia in three years.
The central bank’s decision reflects the need to balance inflation risks with weak domestic economic activity and sluggish credit growth. The Bank of Namibia has also been closely monitoring developments in global energy prices and their potential impact on domestic inflation.
The June rate increase was partly driven by concerns that higher oil prices could generate broader inflationary pressures. The central bank said a moderate tightening of monetary policy was necessary to contain potential second-round effects from the energy shock while protecting the country’s currency arrangement.
Namibia’s dollar is pegged one-to-one to the South African rand, making monetary policy in Pretoria an important consideration for the Bank of Namibia. Maintaining an appropriate interest rate differential helps support capital flows and protect the currency peg.
The central bank has also maintained a relatively cautious approach because of subdued domestic demand. Private-sector credit growth has remained modest, limiting the ability of monetary policy to stimulate economic activity without creating additional inflationary risks.
Namibia’s economy is nevertheless expected to expand in 2026, supported by uranium mining, wholesale and retail trade and financial services. The Bank of Namibia previously projected economic growth of 2.6% for the year, up from 1.7% in 2025.
International reserves have also strengthened, providing additional support for the country’s external position. Reserves stood at about $4 billion at the end of May, equivalent to roughly 3.5 months of import cover.
The central bank is expected to continue monitoring inflation expectations, capital flows and developments in global commodity markets as it determines the direction of monetary policy.
The decision to hold rates follows the South African Reserve Bank’s decision in July to keep its benchmark rate unchanged at 7%, meaning Namibia’s repo rate remains 25 basis points below South Africa’s.
For households and businesses, the rate hold means borrowing costs are unlikely to fall in the immediate term. However, maintaining the rate at 6.75% gives the central bank room to assess whether inflationary pressures are temporary before making further changes to monetary policy.
Emmanuel Abara Benson is a business journalist and editor covering artificial intelligence, global markets, and emerging technology.
He has previously worked with Business Insider Africa and Nairametrics, reporting on finance, startups, and innovation.
His work focuses on AI, digital economy, and global tech trends.
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