BoN keeps repo rate unchanged

16 Apr 2014 16:20pm
WINDHOEK, 16 APR (NAMPA) – Namibia’s repo rate remains unchanged at 5.50 per cent, the Bank of Namibia (BoN) announced on Wednesday.
The repo (repossession) rate is the discount rate at which a central bank repurchases government securities from the commercial banks.
The central bank’s Director of Strategic Communication and Financial Sector Development Ndangi Katoma told a media briefing in the capital that the BoN has decided to keep the Repo rate unchanged in order for the bank to continue supporting the domestic economy.
He said the global economy improved during the fourth quarter of 2013, and it is expected to expand further in 2014.
“The performance of the Namibian economy remained broadly satisfactory during the first two months of this year, and looking ahead, Namibia's prospects for 2014 are encouraging, as economic growth is expected to continue and inflation will remain at a sustainable level,” he stated.
Katoma further explained that international reserves are still able to sustain the fixed exchange rate, although the rapid growth of imports and sustained double-digit growth of instalment credit may put pressure on reserves, thus warranting monitoring.
The central bank could have decreased the repo rate to temporarily expand money supply, as banks swap their holdings of government securities for cash or alternatively, the BoN could have increased the repo rate to contract the money supply.