Repo rate remains unchanged
07 Dec 2016 15:10pm
WINDHOEK, 07 DEC (NAMPA) - The central bank has kept the repo rate unchanged at 7 per cent to support growth and maintain the one-to-one link of the Namibian Dollar to the South African Rand.
The repo rate is the rate at which the Bank of Namibia (BoN) lends money to commercial banks in the event of any shortfall of funds.
Speaking during a media briefing here on Wednesday, BoN Governor Ipumbu Shiimi said the decision was taken during the last Monetary Policy Committee (MPC) meeting held on Tuesday.
The decision was taken following a review of the global, regional and domestic conditions, as well as the financial developments since the last meeting held in October, he said.
The BoN repo rate has been at 7 per cent since April 2016 following a hike of 25 basis points in response to the South African Reserve Bank also raising its repo rate to 7 per cent.
The governor noted that the stock of international reserves stood at N.dollars 25 billion which increased from N.dollars 22.6 billion in October and from N.dollars 19.2 billion in August this year.
Shiimi explained that the increase occurs due to the swap of foreign assets (investments) for local ones as part of moves by the central bank to boost the foreign reserves.
Doing so will also improve governments liquidity position.
He noted that the bank has recently signed an agreement with the Government Institutions Pension Fund to move about N.dollars 5 billion worth of assets from abroad to Namibia.
Last year, the GIPF swapped foreign assets worth N.dollars 3 billion for local ones.