WINDHOEK, Oct 26 (Reuters) – Namibia’s central bank on Wednesday raised its main lending rate by 75 basis points to 6.25% NACBIR=ECI, tightening policy further to try to curb inflation and matching a move by South Africa’s central bank last month.
Namibia’s annual inflation slowed to 7.1% last month NACPIY=ECI from 7.3% in August.
As well as trying to ensure price stability, the Bank of Namibia also tries to safeguard the 1:1 link between the Namibian dollar and South African rand, which means it often mirrors rate decisions by the its neighbour’s central bank.
Inflation is now forecast to average around 6.1% for the year, up from the 5.8% forecast at the last Monetary Policy Committee (MPC) meeting in August, the central bank said.
The central bank confirmed it expected the domestic economy to grow by 3.2% in 2022, mainly driven by diamond and gold mining, and coupled with better recovery prospects across most sectors.
“To continue anchoring inflation expectations, safeguarding the peg arrangement while meeting the country’s international financial obligations the MPC decided to increase the repo rate by 75 basis points to 6.25%,” Bank of Namibia governor Johannes Gawaxab said.
South Africa’s central bank delivered another 75 basis point interest rate hike in September as part of effort to quell inflation. Read full story
(Reporting by Nyasha Nyaungwa; Writing by Anait Miridzhanian; Editing by Tomasz Janowski)