The Bank of Namibia slashed its benchmark repo rate by 25 bps to 6.50 percent on August 14th 2019, to support the domestic economy and maintain the one-to-one link between the Namibian dollar and the South African rand. This is the first cut since August 2017 and comes after the South African Reserve Bank's decision to cut its own interest rate by 25 basis points to 6.50% in July. Policymakers noted that economic activity remained subdued in the first six months of the year, as reflected in mining, construction, electricity, and wholesale & retail trade. Other sectors such as manufacturing, transport and communication improved, but the economy is projected to remain weak in 2019. Meantime, headline inflation continued its downward trajectory in June when it reached an over 1-year low of 3.9 percent from 4.1 percent in the prior month. Interest Rate in Namibia averaged 7.06 percent from 2007 until 2019, reaching an all time high of 10.50 percent in May of 2007 and a record low of 5.50 percent in August of 2012.
Interest Rate in Namibia is expected to be 6.50 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Namibia to stand at 6.00 in 12 months time. In the long-term, the Namibia Interest Rate is projected to trend around 5.50 percent in 2020, according to our econometric models.