Loise Shiimi
Economists anticipate that the central bank’s Monetary Policy Committee (MPC) will maintain the repo rate at 6.50% in their first announcement of 2026, which will take place later today.
Financial advisor, Loise Iipinge, stated that the Bank of Namibia (BoN) is unlikely to raise the repo rate at this time, explaining that “A high repo rate discourages borrowing, which means that consumers and investors may not have access to funds from commercial banks. By keeping it steady, those who wish to borrow will have the opportunity to do so.”
Iipinge also pointed out that with the appointment of a new governor, it is likely that any changes to the repo rate will be postponed until March, allowing them to assess the decisions made by South Africa’s Reserve Bank regarding its own repo rate before making any adjustments in the next meeting.
Currently, South Africa’s repo rate stands at 6.75%, 0.25% higher than Namibia’s. Iipinge underscored that this slight difference is insignificant, given the interconnectedness of the economies and currencies of both countries.
Regarding the recent decline in inflation, which has fallen to 2.9% from 3.2% recorded in January 2025, Iipinge cautioned that this decrease may not last long and could rise again soon. However, she also indicated that there is a potential chance for lowering the repo rate to stimulate the economy and facilitate borrowing.
“Historically, when the repo rate decreased, many farmers took advantage by investing in equipment and services for their agricultural operations,” she noted.
Another economist, Peter Frans, echoed this sentiment, predicting that the repo rate will remain unchanged. He reasoned that current factors influencing inflation and the financial landscape do not warrant an adjustment at this time.
“With fuel prices already having declined, there is little justification for raising or lowering the repo rate; maintaining it aligns with our policy objectives,” he said.
Frans also indicate that a decrease could eventually occur, but not in the immediate future or during the next MPC meeting. Furthermore, he shared that those who have financed their homes and vehicles through banks will benefit from the current rate, as it remains manageable.
“This is an opportune moment for business owners to secure loans and expand their operations, and farmers can likewise capitalise on this to invest in their agricultural activities,” he stated.
