Bank of Namibia raises repo rate to 7%
The central bank increased borrowing costs by 25 basis points to protect the Namibia Dollar's peg to the South African Rand.
The Bank of Namibia increased its repo rate by 25 basis points to 7.00% on Wednesday, raising the prime lending rate to 10.50%. This move by the Monetary Policy Committee aims to curb inflation and prevent capital outflows. Borrowers with variable-rate loans will likely see higher monthly repayments.
Governor Ebson Uanguta stated the decision was necessary to maintain the Namibia Dollar's one-to-one peg with the South African Rand and manage inflationary pressures from rising fuel prices. He noted the need to reduce the interest rate gap with South Africa to safeguard international reserves. The committee unanimously agreed on the policy tightening.
Namibia's annual inflation reached 5.4% in September 2026, up from June, driven by transport costs. The bank now forecasts 4.2% average inflation for 2026, up from 3.5% in 2025, due to persistent elevated global energy prices. Brent crude oil recently hit US$116 per barrel amid Middle East tensions.
Why it mattersHouseholds and businesses face higher borrowing costs due to the central bank's decision to increase the repo rate.