All eyes on Shiimi
Jo-Maré Duddy - Namibians are waiting with bated breath this morning to hear whether the Bank of Namibia (BoN) will follow in the footsteps of the South African Reserve Bank (SARB) and kick-start interest rate hikes.
Currently the BoN's repo rate is 6.75%. Should BoN governor Ipumbu Shiimi announce an increase, it will be the first movement in the rate since August last year. The prime lending rate of commercial banks, currently at 10.5%, will follow suit and increase by the same percentage points.
The head of fixed income at Cirrus, Dylan van Wyk, expects the BoN to follow the SARB recent example and increase the repo by 25 basis points to 7%.
“Market expectations are for short-term interest rates to continue increasing, thus Namibia will likely try to keep our repo rate at least 25 basis points higher than South Africa in case the SARB hikes in January,” Van Wyk says.
The head of research at PSG Namibia, Eloise du Plessis, says it is unlikely that interest rates will rise.
“Despite the upward trend in the consumer price index, the headline inflation rate is still within an acceptable level and economic growth remains anaemic,” she says.
She believes the current buffer of 25 basis points between the repo rates in Namibia and South Africa will allow the BoN to keep its repo unchanged.
Currently the BoN's repo rate is 6.75%. Should BoN governor Ipumbu Shiimi announce an increase, it will be the first movement in the rate since August last year. The prime lending rate of commercial banks, currently at 10.5%, will follow suit and increase by the same percentage points.
The head of fixed income at Cirrus, Dylan van Wyk, expects the BoN to follow the SARB recent example and increase the repo by 25 basis points to 7%.
“Market expectations are for short-term interest rates to continue increasing, thus Namibia will likely try to keep our repo rate at least 25 basis points higher than South Africa in case the SARB hikes in January,” Van Wyk says.
The head of research at PSG Namibia, Eloise du Plessis, says it is unlikely that interest rates will rise.
“Despite the upward trend in the consumer price index, the headline inflation rate is still within an acceptable level and economic growth remains anaemic,” she says.
She believes the current buffer of 25 basis points between the repo rates in Namibia and South Africa will allow the BoN to keep its repo unchanged.
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