BoN records increase in international reserves

17 Feb 2016 16:50pm
WINDHOEK, 17 FEB (NAMPA) - The Bank of Namibia (BoN) this week recorded about N.dollars 27,4 billion in international reserves, which means Namibia has security to pay foreign debt and have the local dollar remain pegged to the South African Rand.
Speaking at a media briefing here during the Monetary Policy announcement on Wednesday, BoN Governor Ipumbu Shiimi said is an increase compared to the N.dollars 23 billion reported during the last Monetary Policy Committee (MPC) meeting held on 08 December 2015.
Shiimi said the BoN’s stock of international reserves remains sufficient to sustain the one-to-one link of the Namibian Dollar to the South Africa Rand, being 5.8 times the currency in circulation.
He also boasted that the BoN’s foreign reserves are above the international benchmark.
“This level is now at 3.5 months of import cover, higher than the international benchmark of three months.”
Shiimi said this increase in the level of reserves was primarily due to Southern African Customs Union (SACU) inflows and the depreciation of the domestic currency following the weakening of the Rand.
The governor added that the MPC meeting held on Tuesday projected that the Namibian economy would grow by 4.3 per cent this year as supported by good growth prospects across industries.
Last year's economy growth was estimated at 4.5 per cent.
Risks to the domestic growth remain and include soft commodity prices, sustained effects of the drought and slow recovery in the country's trading partner economies.
“If the drought situation went beyond this, we will not be able to see the growth focus projected here.”
Shiimi said inflation during January increased to 5,3 per cent compared to 3,7 per cent December 2015, adding the low international oil price has been the factor behind the downward pressure on inflation in 2015, but the depreciation of the Namibia Dollar against the United States (US) Dollar somewhat reversed the benefits of cheaper oil.
Inflation is expected to increase gradually for the remainder of the year.