No reason to delink from the Rand: Geingob

12 Apr 2017 17:40pm
WINDHOEK, 12 APR (NAMPA) – President Hage Geingob said Government does not see any reason to delink the Namibian Dollar from the South African Rand.
“The recent downgrade of South Africa’s foreign debt instruments by rating agencies may have an impact on our own debt ratings and costs of capital but at the moment, we do not see any reason to delink,” said Geingob whilst delivering his third State of the Nation Address in Parliament on Wednesday.
Two weeks ago, the Rand weakened after President Jacob Zuma’s Cabinet reshuffle in which he sacked Finance Minister, Pravin Gordhan and replaced him with Minister of Home Affairs, Malusi Gigaba.
Last week, S&P Global Ratings downgraded South Africa’s sovereign credit rating to ‘junk status’, which could affect the Rand’s value and subsequently the Namibian Dollar.
Geingob assured Namibians that Government will carefully monitor macroeconomic conditions and if need be, attune policies accordingly to ensure a stable environment for business and households to operate in.
He indicated the Namibian economy was expected to grow above 4 per cent at the beginning of 2016 but Government, during the mid-term budget review, realised that projection was unattainable.
“Consequently, we had to effect the deepest cuts to the budget since Independence to ensure fiscal sustainability and put the economy on a sustainable long-term growth trajectory.”
Geingob said since the budget cuts enforced by Minister of Finance, Calle Schlettwein the fiscal position has stabilised.
“We expect modest growth for 2017, while the longer-term growth outlook has improved considerably,” said the President.
“If there is one thing that we can be certain of is that exogenous shocks will occur again, perhaps even sooner than anticipated.”