3rd consecutive 75 bps interest hike looming
SARB increases repo rate to 7%
The last monetary policy announcement for the year 2022 by the Bank of Namibia is expected to take place on 30 November.
The South African Reserve Bank (SARB) yesterday announced a 75 basis points increase in the repo rate from 6.25% to 7.0%.
The prime lending in South Africa currently stands at 10.5%. Year to date, the South African Reserve Bank increased the repo rate by 325 basis points. Fin24 recently reported that inflation in South Africa picked up to 7.6% in October 2022, from 7.5% recorded in the previous month. The main contributors to inflation were food and non-alcoholic beverages, which increased 12% on a year-on-year basis and transport, which was up 17.1%.
In Namibia, inflation came in at 7.1% in October 2022, the same rate recorded in September 2022. Inflation continues to be driven mainly by transport and food non-alcoholic beverages categories.
According to IJG Securities, Namibia’s October annual inflation print at 7.1% continued to trend above the SARB’s target ceiling of 6.0% for the fourth consecutive month. “We expect both the SARB and the Bank of Namibia (BoN) to maintain a hawkish monetary stance for as long as inflation remains elevated above the target range,” IJG said.
The last monetary policy announcement for the year 2022 is expected to take place on 30 November 2022. The repo rate in Namibia currently stands at 6.25%, and the prime lending rate at 10%.
Year to date, the Bank of Namibia increased the repo rate by 250 basis points. If the Bank of Namibia hikes the repo rate by 75 basis points at the upcoming monetary policy announcement, this will be the third consecutive 75 basis points interest rate hike this year. The expected increase will bring the repo rate on par with South Africa at 7%.
According to Simonis Storm, tight financial conditions for indebted Namibian households and corporates lie ahead as rate hikes are expected to rise further towards the end of this year and during first quarter of 2023.
“Going forward, we certainly expect inflation to come in lower during the remainder of 2022 and 2023 as well. This is mainly due to observing more global deflationary pressures and the fact that inflation rates will be coming off a high base,” Simonis Storm [email protected]
The prime lending in South Africa currently stands at 10.5%. Year to date, the South African Reserve Bank increased the repo rate by 325 basis points. Fin24 recently reported that inflation in South Africa picked up to 7.6% in October 2022, from 7.5% recorded in the previous month. The main contributors to inflation were food and non-alcoholic beverages, which increased 12% on a year-on-year basis and transport, which was up 17.1%.
In Namibia, inflation came in at 7.1% in October 2022, the same rate recorded in September 2022. Inflation continues to be driven mainly by transport and food non-alcoholic beverages categories.
According to IJG Securities, Namibia’s October annual inflation print at 7.1% continued to trend above the SARB’s target ceiling of 6.0% for the fourth consecutive month. “We expect both the SARB and the Bank of Namibia (BoN) to maintain a hawkish monetary stance for as long as inflation remains elevated above the target range,” IJG said.
The last monetary policy announcement for the year 2022 is expected to take place on 30 November 2022. The repo rate in Namibia currently stands at 6.25%, and the prime lending rate at 10%.
Year to date, the Bank of Namibia increased the repo rate by 250 basis points. If the Bank of Namibia hikes the repo rate by 75 basis points at the upcoming monetary policy announcement, this will be the third consecutive 75 basis points interest rate hike this year. The expected increase will bring the repo rate on par with South Africa at 7%.
According to Simonis Storm, tight financial conditions for indebted Namibian households and corporates lie ahead as rate hikes are expected to rise further towards the end of this year and during first quarter of 2023.
“Going forward, we certainly expect inflation to come in lower during the remainder of 2022 and 2023 as well. This is mainly due to observing more global deflationary pressures and the fact that inflation rates will be coming off a high base,” Simonis Storm [email protected]
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