Inflation drops while repo rate remains steady

Despite the prevalence of a gloomy global economy, the Bank of Namibia (BoN) announced that Namibia's inflation rate has reduced from 6.2% in June to 5.8% in July, while the repo rate remained at 5,50%.

The announcement was made today by the central bank after its periodic assessment of the monetary policy and economic outlook.

“Inflation is expected to remain stable, around current levels, for the remainder of the year. The lagged effect of depreciation against major currencies continues to constitute a risk to the inflation outlook,” says BoN bank's deputy governor, Ebson Uanguta.

He attributes the fall largely a slow down in price increases in food items, as well as electricity, gas and other fuels.

However, transport inflation increased in July when compared to June says

Meanwhile, the repo rate remained unchanged at 5.50% to support the growth of the domestic economy.

Uanguta notes that the domestic economy continues to grow although it is projected to moderate to 4.7% compared to the 5% seen in 2012.

The growth outlook is to be overshadowed by declines in key commodity prices, particularly uranium and copper, high food and energy prices and especially the negative impact of the current drought.

The stock of foreign reserves from Southern African Custom Union (SACU) has increased and currently stands at N$18.1 billion.