12 Dec 2013 14:00pm
WINDHOEK, 12 DEC (NAMPA) - The repo rate will remain unchanged at 5.50 per cent, the Governor of the Bank of Namibia (BoN), Ipumbu Shiimi announced on Thursday.
The repo rate is the rate at which private banks borrow money from the central bank.
The repo rate has remained unchanged since August 2012.
Announcing the BoNs monetary policy stance during a media conference in the capital, Shiimi noted that despite the fragile global environment, growth in Namibia remains relatively strong, although it has been revised down to around four per cent in 2013, lower than five per cent in 2012.
The monetary policy committee (MPC) is of the view that the repo rate should, for the time being, be maintained at the current level to support the domestic economy. The MPC has therefore decided to keep the repo rate unchanged at the current level of 5.50 per cent, he said.
Inflation slowed in October, and is expected to remain low for the remainder of the year. International reserve levels have fallen due to continued high levels of imports and large outflows of funds. However, reserves remain adequate to maintain the fixed currency arrangement and meet other international obligations.
Meanwhile, global growth is starting to pick up, driven by sustained high growth in emerging market economies and a gradual economic recovery in advanced economies, particularly China and India, according to Shiimi. With the exception of South Africa, real Gross Domestic Product (GDP) growth increased in most emerging market economies during the third quarter of 2013.
However, uncertainties surrounding the exit from an expansionary monetary policy in the United States, in a context of declining unemployment rates, have added volatility to emerging markets, with consequences on their exchange rates and international capital flows, added Shiimi.