No interest rate relief as BoN leaves repo unchanged

Staff reporter – Economic activity in key domestic activities which remained “weak” in the first ten months of 2017 compared to the corresponding period last year, convinced the Monetary Policy Committee (MPC) of the Bank of Namibia (BoN) to leave its repo unchanged at 6.75%.

That means that the prime lending rates of commercial banks in Namibia will remain at 10.5%.

Announcing the latest decision of the MPC yesterday, BoN Governor Ipumbu Shiimi said the weak economic performance was mainly reflected in the construction, wholesale and retail trade, as well as the transport sectors.

Construction grew by a massive -51.9% in the second quarter of 2017 – its sixth consecutive quarter of negative. Wholesale and retail penned in -8.2%, having spent the last three quarters in negative territory. Transport recorded growth of 3.5% down from 5.1% in the corresponding quarter of 2016.

The Namibia Statistics Agency (NSA) will release the gross domestic product (GDP) figures for the third quarter next week.

According to Shiimi, other key economic activities such as mining, the number of livestock marketed, communication and manufacturing output have improved in the ten months to October 2017.

“The momentum displayed by the latter activities, if sustained, would create better prospects and help with economic recovery going forward,” he said.

According to the central bank’s Economic Outlook in July, the BoN expects GDP growth of 2.1% for 2017.