Repo rate static
The Bank of Namibia's Monetary Policy Committee last week decided to leave the repo rate as is, in line with that of South Africa.
The Monetary Policy Committee of the Bank of Namibia last week kept the repo rate unchanged at 7%. The central bank said the decision was necessary to support economic growth and help maintain the one-to-one peg between the Namibian dollar and the rand.
Sharing his views on the decision to maintain the repo rate, Bank of Namibia governor Iipumbu Shiimi said inflation remained high for the first two months of 2017, increasing from an average of 6.7% in 2016 to 8.2% in January 2017. It slowed to 7.8% in February.
“The high levels of 2017 were mainly driven by the rise in the categories housing, water, electricity, gas and other fuels, transport and food. Inflation will remain elevated for 2017. We expect it to be in the region of 7% to 7.5% for 2017,” said Shiimi.
Over the first two months of 2017, growth in private-sector credit extension slowed for consumers and businesses.
“The downward trend we have seen is continuing for Private-Sector Credit Extension (PSCE). That is a good development, however, the unfortunate thing is that we want businesses to borrow and invest.”
The annual growth of PSCE slowed from a peak of 13.7% in January 2016 to an average of 8.8% in the first two months of 2017.
The preliminary stock of international reserves stood at N$22.3 billion as at the 31 March 2017.
“At this level, the stock of international reserves was estimated to cover 2.7 months of import. The stock of international reserves also remains sufficient to sustain the one-to-one link of the Namibian dollar and the rand.”
The domestic economy grew by only 0.2% during 2016, compared to stronger growth of 6.1% in 2015. The slowdown in growth was mainly attributed to a bleak performance in the mining sector, particularly diamond production. Output in the manufacturing sector, especially the production of cement, refined zinc and blister copper, as well as the wholesale and retail trade sector, which showed resilience in the past, also fell.
Downside risks to economic growth also remained, said Shiimi. Risks to growth include uncertainty due to shifts towards protectionism by the Trump administration in the US and further implications for global trade, slower growth in China, geopolitical risks, weak bank balance sheets of Euro Zone member countries and high inflation in some emerging markets and development economies.
The South African Reserve Bank also kept its repo rate unchanged at 7% when its MPC met in March.
OGONE TLHAGE
Sharing his views on the decision to maintain the repo rate, Bank of Namibia governor Iipumbu Shiimi said inflation remained high for the first two months of 2017, increasing from an average of 6.7% in 2016 to 8.2% in January 2017. It slowed to 7.8% in February.
“The high levels of 2017 were mainly driven by the rise in the categories housing, water, electricity, gas and other fuels, transport and food. Inflation will remain elevated for 2017. We expect it to be in the region of 7% to 7.5% for 2017,” said Shiimi.
Over the first two months of 2017, growth in private-sector credit extension slowed for consumers and businesses.
“The downward trend we have seen is continuing for Private-Sector Credit Extension (PSCE). That is a good development, however, the unfortunate thing is that we want businesses to borrow and invest.”
The annual growth of PSCE slowed from a peak of 13.7% in January 2016 to an average of 8.8% in the first two months of 2017.
The preliminary stock of international reserves stood at N$22.3 billion as at the 31 March 2017.
“At this level, the stock of international reserves was estimated to cover 2.7 months of import. The stock of international reserves also remains sufficient to sustain the one-to-one link of the Namibian dollar and the rand.”
The domestic economy grew by only 0.2% during 2016, compared to stronger growth of 6.1% in 2015. The slowdown in growth was mainly attributed to a bleak performance in the mining sector, particularly diamond production. Output in the manufacturing sector, especially the production of cement, refined zinc and blister copper, as well as the wholesale and retail trade sector, which showed resilience in the past, also fell.
Downside risks to economic growth also remained, said Shiimi. Risks to growth include uncertainty due to shifts towards protectionism by the Trump administration in the US and further implications for global trade, slower growth in China, geopolitical risks, weak bank balance sheets of Euro Zone member countries and high inflation in some emerging markets and development economies.
The South African Reserve Bank also kept its repo rate unchanged at 7% when its MPC met in March.
OGONE TLHAGE
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