The Bank of Namibia’s Monetary Policy Committee (MPC) unanimously decided to keep the Repo rate unchanged at 6.75%. This decision aims to safeguard the one-to-one peg between the Namibian Dollar and the South African Rand while continuing to support the domestic economy.

The announcement follows the MPC’s bi-monthly meeting held on 11 and 12 August. A detailed review informed the committee’s decision of current and projected economic developments, both domestically and internationally.

According to the Bank of Namibia Governor, Johannes !Gawaxab, the domestic economy maintained positive momentum during the first six months of 2025. Inflation has remained subdued, and private sector credit extension (PSCE) growth has improved. The merchandise trade deficit has continued to narrow, and the country’s stock of international reserves remains sufficient to maintain the currency peg and meet its international financial obligations.

The governor said the domestic economy expanded during the first half of 2025, driven by improved activity in mining, tourism, and other sectors.

Looking ahead, real GDP growth is projected to be 3.5% in 2025 and 3.9% in 2026. This forecast, however, represents a slight downward revision from previous projections, primarily due to a contraction in primary industries, particularly the livestock sector, which is still impacted by the 2024 drought, he concluded.

In line with previous guidance, !Gawaxab said commercial banks are expected to reduce their prime lending rates by 12.5 basis points to 10.375% by the end of September 2025. This normalization of the prime-repo spread is expected to provide further support for economic activity and credit growth. The next MPC meeting is scheduled for 13 and 14 October.