Repo rate reduced to 3.75 percent

Repo rate reduced to 3.75 percent

On the 18th of August 2020, the Monetary Policy Committee (MPC) of the Bank of Namibia held its bi-monthly meeting and decided to reduce the Repo rate by 25 basis points, from 4 percent to 3.75 percent, a new historic low. The decision was taken following a review of global, regional and domestic economic and financial developments. This translates to a cumulative 2.75 percentage points reduction in the Repo rate since the beginning of 2020.

The MPC had to balance the need for further monetary stimulus in the face of the COVID-19 pandemic-induced weaknesses of the economy, against the importance to not undermine sound saving and investments decisions in the economy.

The COVID-19 pandemic has caused domestic economic activity to contract severely during the first six months of 2020. The slump was reflected in sectors such as mining, agriculture, manufacturing, construction, tourism, wholesale and retail trade as well as transport and storage. Domestic inflation remained at a historic low level. The annual average inflation declined to 2.1 percent during the first seven months of 2020 compared to 4.3 percent in the corresponding period of 2019.

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