The Monetary Policy Committee of the Bank of Namibia has decided to keep the repo rate unchanged at 6.75%.

This was announced by the central bank's governor, Johannes !Gawaxab, following the committee's second bi-monthly meeting of the year, held to decide on the appropriate monetary policy stance for the next two months.

 Governor !Gawaxab highlighted that the Monetary Policy Committee also carried out a comprehensive review of current and expected domestic, regional, and global economic developments.

The other reason is to continue safeguarding the peg between the Namibian dollar and the South African rand while supporting the domestic economy amid heightened global policy uncertainty.

"Accordingly, the MPC was in broad agreement with a projected trajectory for inflation that accelerates moderately but then straddles levels around 4.5% in the medium term. The MPC noted that the potentially slower global growth would lower the projected trajectories of most commodity prices, oil included, but this favourable impact on domestic inflation seemed to be offset by a weaker exchange rate. Some upward price pressures from administered prices also seemed likely in the coming months."

The Monetary Policy Committee further considered the magnitude of the trade deficit and the impact of the imminent settling of international debt obligations on the country's international reserve holdings.

"Against this background, the MPC decided to keep the repo rate unchanged at 6.75%. Commercial banks are accordingly expected to maintain their prime lending rates at 10.50%. This policy stance will continue safeguarding the one-to-one link between the Namibian dollar and the South African rand while supporting domestic economic activity."

The next monetary policy announcement is expected in June.