BoN shows mercy … for now
Fitch Ratings anticipates that the central bank will maintain higher repo rates than its South African counterpart.
Denver Kisting - Namibians have again been spared an interest rate hike by the country’s central bank.
However, this news competes against an announcement that the country’s international rating retains its junk status.
Equally, the Namibia Statistics Agency (NSA) yesterday said Namibia’s economy grew by -0.9% during 2017.
This growth is less than the NSA had projected earlier.
The governor of the Bank of Namibia (BoN), Ipumbu Shiimi, yesterday announced the bank’s monetary policy committee had decided to maintain the repo rate at 6.75%.
Shiimi said this decision came in the wake of a review of global, regional and domestic economic and financial developments.
In a statement released by the BoN, Shiimi said: “This rate remains appropriate to continue supporting domestic growth, while maintaining the one-to-one link between the Namibia dollar and the South African rand.”
Global outlook
According to Shiimi, “the global economy is projected to grow by 3.9% in 2018 – up from 3.8% in 2017 – on account of favourable financial conditions and strong investment in both advanced economies and emerging market and developing economies.”
He cautioned that the global outlook remains vulnerable. “Key risks to the global outlook remain and include, amongst others, increased levels of trade protectionism, geopolitical tensions as well as the global impact of monetary policy normalisation.”
The repo rate has remained unchanged since August last year when, for the first time since 2012, the BoN had reduced the rate at which money is lent to commercial banks.
At the time, deputy governor Ebson Uanguta announced that the monetary policy committee of the central bank had reduced it by 25 basis points to 6.75%.
Yesterday’s announcement came on the same day that the ratings agency, Fitch, issued a statement in which it retains its junk status.
Issuing its latest opinion on the Namibian sovereign credit rating, Fitch said it expected the BoN to maintain higher repo rates than the South African Reserve Bank to "forestall capital outflows and protect international reserves which we nonetheless forecast to fall to 3.2 months of current account payments in 2020 from 4.4 months in 2017".
However, this news competes against an announcement that the country’s international rating retains its junk status.
Equally, the Namibia Statistics Agency (NSA) yesterday said Namibia’s economy grew by -0.9% during 2017.
This growth is less than the NSA had projected earlier.
The governor of the Bank of Namibia (BoN), Ipumbu Shiimi, yesterday announced the bank’s monetary policy committee had decided to maintain the repo rate at 6.75%.
Shiimi said this decision came in the wake of a review of global, regional and domestic economic and financial developments.
In a statement released by the BoN, Shiimi said: “This rate remains appropriate to continue supporting domestic growth, while maintaining the one-to-one link between the Namibia dollar and the South African rand.”
Global outlook
According to Shiimi, “the global economy is projected to grow by 3.9% in 2018 – up from 3.8% in 2017 – on account of favourable financial conditions and strong investment in both advanced economies and emerging market and developing economies.”
He cautioned that the global outlook remains vulnerable. “Key risks to the global outlook remain and include, amongst others, increased levels of trade protectionism, geopolitical tensions as well as the global impact of monetary policy normalisation.”
The repo rate has remained unchanged since August last year when, for the first time since 2012, the BoN had reduced the rate at which money is lent to commercial banks.
At the time, deputy governor Ebson Uanguta announced that the monetary policy committee of the central bank had reduced it by 25 basis points to 6.75%.
Yesterday’s announcement came on the same day that the ratings agency, Fitch, issued a statement in which it retains its junk status.
Issuing its latest opinion on the Namibian sovereign credit rating, Fitch said it expected the BoN to maintain higher repo rates than the South African Reserve Bank to "forestall capital outflows and protect international reserves which we nonetheless forecast to fall to 3.2 months of current account payments in 2020 from 4.4 months in 2017".
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