The Bank of Namibia has again increased the repo rate, this time by 50 basis points, from 5.5 to 6.75 percent.

Governor Johannes !Gawaxab says the raise is done in an effort to anchor inflation expectations as well as safeguard the one-on-one peg arrangement with South Africa.

!Gawaxab says the decision was taken following a comprehensive review of global, regional, and domestic economic developments.

There was a need, he says, to strike a balance between controlling inflation expectations and supporting the domestic economy's recovery.

"Moreover, this monetary policy stance is necessary to narrow the current negative real policy interest rate and is consistent with that taken around the globe and in the region by policymakers, acting with resolve to slow and eventually reverse the current acceleration in inflation."

Recovery, !Gawaxab says, was mainly reflected in sectors such as mining, agriculture, transport, communication, and tourism, as well as wholesale and retail.

Namibia's average inflation rate rose to 5.9% during the first ten months of this year; this compares to a 3.5% increase in the same period in 2021.

This is the sixth consecutive rate hike this year, pushing borrowing costs to levels not seen since July of 2019.

The rise in inflation was predominantly driven by an increase in transport costs and the effects of the COVID-19 pandemic on economic activities globally.

Namibia's annual inflation rate remained steady at 7.1% during October.

!Gawaxab remains optimistic that Namibia's economic growth can still reach four percent this year.