Namibia Interest Rate2007-2021 Data | 2022-2023 Forecast | Calendar | Historical

The Bank of Namibia left its benchmark interest rate steady at a record low of 3.75% during its February of 2021 meeting, following a similar decision by the South African Reserve Bank in January. Policymakers said that the current stance remains 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 bank noted that domestic economic activity slowed considerably in 2020 compared to 2019, with contractions observed in key sectors such as tourism, wholesale and retail trade, mining, manufacturing, construction, as well as transport and storage. The economy is projected to have contracted by a record 7.3% in 2020, before returning to an expected moderate recovery of 2.6% in 2021. Meantime, annual average inflation fell to 2.2% in 2020 from 3.7% in 2019 and it is seen around 3% in 2021.

The Bank of Namibia kept its benchmark interest rate steady at a record low of 3.75% during its December of 2020 meeting, following a similar decision by the South African Reserve Bank in November. Policymakers said that the current stance is still 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. Policymakers said that available indicators suggest that domestic activity contracted during the first ten months of the year, and it is estimated to register an overall contraction in 2020, before an expected modest recovery in 2021. Meanwhile, headline inflation fell to 2.2% during the first ten months of the year, well below 4% a year ago; and it is expected to average 2.3% in 2020.

The Bank of Namibia kept its benchmark interest rate steady at a record low of 3.75% during its October of 2020 meeting, following a similar decision by the South African Reserve Bank in September. Policymakers said that the current stance is still 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. Policymakers said that available indicators suggest that domestic activity contracted during the first eight months of the year, amid declines in mining, manufacturing, tourism, wholesale & retail trade and transport & storage. Other sectors such as telecommunication and electricity generation improved, but the economy is projected to shrink by 7.8% in 2020 before a moderate recovery of 2.1% in 2021. Meanwhile, headline inflation fell to 2.2% during the first nine months of the year, well below 4.2% a year ago; and it is expected to average 2.3% in 2020.

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.