Namibian central bank leaves key interest rate on hold
Namibia's central bank kept its main lending rate unchanged this week, aiming to safeguard a currency peg to the South African rand and support growth. The decision to hold the rate at 7.75% is the second time in a row that the Bank of Namibia has held its key rate after a 50 basis point (bps) hike in June and two 25 bps increases earlier in 2023.
"This policy stance will continue to safeguard the one-to-one link between the Namibia Dollar and the South African Rand while supporting domestic economic activity, particularly the overstretched households and businesses," central bank governor Johannes !Gawaxab said.
Inflation in the southern African country rose to 5.4% in September from 4.7% in August, and the central bank said it forecast higher inflation this year before expecting it to slow down in 2024. "The projected average inflation for 2023 has been revised upwards by 0.3 percentage point to 5.9% … mainly on the back of the recent surge in domestic fuel pump prices," !Gawaxab added. Inflation is seen at 4.8% for 2024.
Points clés à retenir
We’ve covered inflation movements across different African economies more frequently in the last few weeks. But what is inflation and why does it matter? Put simply, inflation is the rate at which prices for goods and services increase across an economy. The rate at which prices change can have ramifications across the economy, affecting businesses and consumers alike. For instance, when high levels of inflation occur, the value of one’s money (also known as purchasing power) erodes, as consumers are no longer able to buy as many products with the same amount of money, ultimately affecting businesses that produce and sell to them.