Windhoek: The Monetary Policy Committee (MPC) of the Bank of Namibia (BoN) has maintained the repo rate at 6.50 per cent for the third consecutive time, citing subdued domestic growth, contained inflation, and the need to safeguard the currency peg. The decision was taken during the MPC's first bi-monthly meeting of 2026, held on 16 and 17 February, following a comprehensive assessment of global and domestic economic conditions.
According to Namibia Press Agency, BoN Governor Ebson Uanguta announced the decision on Wednesday, stating that the stance remains appropriate to preserve the one-to-one link between the Namibia Dollar and the South African Rand, while supporting economic activity. "Following extensive deliberations, the MPC unanimously decided to maintain the repo rate at 6.50 per cent," he said. Consequently, commercial banks are expected to keep the prime lending rate unchanged at 10.00 per cent.
Uanguta highlighted that although the global economy remained resilient in 2025 amid trade tensions and policy uncertainty, domestic growth moderated during the first three quarters of the year. Contractions in agriculture, fishing, mining, and manufacturing weighed on overall performance. Despite these challenges, domestic inflation remained well contained, with average inflation declining to 3.5 per cent in 2025 from 4.2 per cent in 2024. The latest reading for January 2026 slowed further to 2.9 per cent.
"Inflation is projected to remain steady at 3.5 per cent in 2026 before moderating to 3.4 per cent in 2027," Uanguta noted, adding that the outlook has been revised downward on expectations of lower oil and food prices. While private sector credit extension remained subdued, reflecting weaker uptake by both households and businesses, the country's external position improved. The merchandise trade deficit narrowed to N.dollars 25 billion in 2025, supported by strong uranium and gold exports.
Foreign reserves rose to N.dollars 51.9 billion at the end of January 2026, equivalent to 3.3 months of import cover, deemed sufficient to sustain the currency peg and meet international obligations. "In determining the appropriate monetary policy stance, the MPC weighed weaker domestic activity and benign inflation against the imperative to safeguard the currency peg," Uanguta explained.
The next MPC meeting is scheduled for 27 and 28 April 2026.