Bank of Namibia keeps repo rate unchanged - CNBC Africa

Bank of Namibia keeps repo rate unchanged

Southern Africa

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Shiimi says diamond mining and manufacturing activates recorded positive growth. PHOTO: New Era

The Monetary Policy Committee (MPC) of the Bank of Namibia has decided to maintain the repo rate at 6.25 per cent.

It added that the recent decline in the growth of household overdraft loans is a welcomed development however, it does remain concerned about the high growth in instalment credit extended to households.

“A sizeable amount of these loans is still largely used to finance unproductive imported luxury goods, hence, putting additional pressure on the international reserves of the country,” said the bank’s governor, Ipumbu Shiimi.

He further stated that developments in the domestic economy point towards improved growth during the first two months of 2015, with inflation continuing to decline.

“The improvement in the domestic economy during the first two months is mainly driven by robust public and private construction activities, coupled with strong sales in wholesale and retail trade,” Shiimi said.

(READ MORE: Namibia MPC pushes repo rate up to 6.25%)

“In addition, diamond mining and manufacturing activates recorded positive growth. Going forward, the Namibian economy is expected to grow by 5.6 per cent in 2015, up from 5.3 per cent in the preceding year.”

Shiimi indicated that risks to domestic growth remain mostly the weak growth in Namibia’s major trading partners and low commodity prices.

Namibia’s statistics office stated on Wednesday that its consumer inflation slowed to 3.4 per cent year-on-year in March from 3.6 per cent in the previous month.

* Additional reporting by Reuters

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