… as economies reflect weaker growth.
The Monetary Policy Committee of the Bank of Namibia has decided to maintain the repo rate at 6.75% following a review of global, regional and domestic economic and financial developments, the Bank of Namibia (BoN) announced yesterday.
The repo rate is the rate at which a country’s central bank lends money to commercial banks and is used by monetary authorities to control inflation.
According to BoN Deputy Governor, Ebson Uanguta, the economy in key advanced Economies and Emerging Market and Developing Economies were estimated to have slightly weakened between 2017 and 2018.
Uanguta during a press briefing presented that global real Gross Domestic Product growth decreased from 3.8% in 2017 to 3.7% last year. This is projected to further decrease to 3.5% this year.
While the advanced economies were estimated to have slowed down by 0.1 percentage point between 2017 and 2018.
“The slowdown is on account of weaker performances in the Euro area, United Kingdom and Japan, whereas growth in the United States accelerated,” the deputy governor said adding that advanced economies are projected to weaken to 2.0% in 2019.
The Emerging Market and Developing Economies have also moderated by 0.1 percentage point between 2017 and 2018, mainly because of China, South Africa and Angola.
Growth rates, on the other hand, have been estimated to increase for Brazil, Russia and India in 2018 in comparison with the growth rates in 2017.
He further said that the domestic economy remained weak while inflation and private sector credit extention growth slowed.
The weak outcome in 2018, Uanguta said was mainly due to the declining economic activity in sectors such as agriculture, wholesale and retail trade.
He said that other sectors such as mining, communication, transport and manufacturing have improved in the same period.
While the construction industry found itself on its knees in recent years, the deputy governor said that because of planned renovations by government on its fixed property, the industry is expected to do well.
Positive movement is also projected from the health, education and public service sectors The annual average inflation rate went from 6.2% in 2017 to 4.3% in 2018 which was as a result of declining housing and food inflation.
The inflation did however increase to 5.1% in December 2018 and is projected to average around 5.6% this year.
When it comes to the stock of international reserves, the deputy governor presented that the international reserves stood at N$30.7 billion from the N$31.1 billion that was reported in the previous MPC statement.
“This amount of international reserves is estimated to cover 4.2 months of imports of goods and services.
At this level, the reserves are sufficient to protect the peg of the Namibia Dollar to the Rand, and meet the country’s international financial obligations,” he said.
Responding to questions regarding Minister of Finance Calle Schlettwein’s comments on the future of the Namibia Dollar attachment to the Rand, the deputy governor said that there are no plans to separate from the Rand, at least not now.
Meanwhile, Bank of Namibia Governor Iipumbu Shiimi and Deutsche Bundesbank’s Jens Weidmann on Wednesday paid a courtesy call on President Hage Geingob to discuss the strengthening of existing ties between the two central banks.
They also discussed sharing of expertise especially for fighting cybercrime.
Shiimi said that the two banks who have a long history, have worked together in a number of central banking avenues including currency management and payment systems.
The governor said that their discussions were on capacity building and that there was no money involved.
Finance minister Calle Schlettwein who was also at the meeting said that while they already have existing debt agreements in place in the form of soft loans, government will not be borrowing as the country’s indebtedness is reaching ceilings where they have to be careful.