Full rate hike impact yet to hit economy

Namibia’s real economy has not yet felt the full impact of the cumulative interest rate hikes of 225 basis points (bps) since last September.This is according to the latest economic review by Simonis Storm (SS).South Africa has a monetary policy lag of 6 to 9 months and the same can be assumed for Namibia, SS said.SS also believes that the sentiment amongst most local members of the Bank of Namibia’s (BoN) Monetary Policy Committee (MPC) “has changed from being fairly conservative, to now being more in favour to move in lock step with the South African Reserve Bank (SARB).”This is because in June’s MPC meeting, one member was in favour of a 75bps hike, whereas the other four members voted for a 50bps hike.The BoN’s current repo rate of 7.75% is still 50bps below that of the SARB’s 8.25%.SS said the real repo rate turned positive in Namibia during the first two months of the past quarter and “now signals that monetary policy is restrictive and will weigh on economic activity going forward”.Going forward, SS expects the Federal Reserve in the US to hike by 25bps at each of their next two meetings, and for both SARB and BoN to follow suit.“Given the dates of BoN’s meetings, it can be that they pre-empt hikes in South Africa and hike by 50bps at their next meeting in August,” SS said.

Full rate hike impact yet to hit economy

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Namibian Sun 2025-09-09

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Full rate hike impact yet to hit economy

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Namibian Sun 2025-09-09

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