Namibia Interest Rate2007-2020 Data | 2021-2022 Forecast | Calendar | Historical

The Bank of Namibia slashed its benchmark interest rate by another 25 bps to a record low of 3.75% during its meeting in August of 2020, following the South African Reserve Bank's interest rate cut by the same margin in July. Policymakers said the current stance is appropriate to continue supporting the economy amid low inflationary pressures and maintain the one-to-one link between the Namibian dollar and the South African rand. The economy is expected to contract by 7.8% in 2020, mainly attributed to the Covid-19 outbreak which affected key sectors such as hotels & restaurants, mining, transport & storage, manufacturing, wholesale & retail trade, financial services and construction. Meanwhile, the GDP is seen recovering to growth rates of 2.1% and 2.7% in 2021 and 2022, respectively. Headline inflation remained unchanged for the third consecutive month at 2.1% in July, well below 3.6% a year before; and it is projected to average around 2% in 2020.

The Bank of Namibia cut its benchmark interest rate by 25 bps to a historic low of 4% during its meeting in June of 2020, saying the current stance is appropriate to continue supporting the economy and maintain the one-to-one link between the Namibian dollar and the South African rand. Policymakers noted that overall domestic activity declined in the first four months of the year, on the back of lockdown measures aimed at containing the spread of Covid-19; and it is projected to contract further in 2020. Meanwhile, inflation has been trending lower, having reached 2.1% in May (vs 4.1% a year before), and it is expected to average 2% in 2020.

The Bank of Namibia cut its benchmark interest rate by 100 bps to 4.25 percent during its meeting in April of 2020, following the South African Reserve Bank's interest rate cut by the same margin on Tuesday. Policymakers said that the decision aims to support weak domestic activity and provide short-term relief amid the extraordinary circumstances arising from the Covid-19 pandemic while maintaining the one-to-one link between the Namibian dollar and the South African rand. The bank noted that domestic activity slowed in the first three months of 2020, mainly due to declines in mining, wholesale & retail trade, manufacturing and tourism. The current estimates for 2020 indicate that the economy will contract significantly while inflation is projected to average below 3 percent.

The Bank of Namibia lowered its benchmark interest rate by 100bps to 5.25 percent at an emergency meeting on March 20th, following the South African Reserve Bank's interest rate cut by the same margin on Thursday. Policymakers said that the decision's main purpose was to cushion the anticipated impact of COVID-19 and support the domestic activity while maintaining the one-to-one link between the Namibian dollar and the South African rand. The economy is expected to continue to weaken in 2020 while inflation is projected to average around 2.6 percent. The Committee finalized saying that will continue to monitor developments in the economy and will take necessary steps to support the Namibian economy during this extraordinary time.