With the monetary policy announcement expected tomorrow, economist Rodney !Hoaeb hopes that the central bank will have consumers in mind, as the increment of the repo rate was already choking.
The effects of fuel increases triggered by geopolitical tensions as well as external shocks have impacted many households and businesses.
!HOA-EB therefore suggests that the central bank keep the repo rate at 6-point-75%, slightly lower than South Africa's 7%.
"One of the macroeconomic effects we are seeing, when we look at the current environment and geopolitical influences, is that oil prices are relatively stable and have remained somewhat subdued. We can therefore expect a decline in global prices, which would affect Namibia and other countries. Secondly, we can look at the level at which oil production stabilises, as well as the stability of the markets and commodity prices. All these factors point in a direction where macroeconomic principles favour keeping rates stable, mainly because the threats are somewhat lower than they were before. I believe that any decision to move in a different direction would therefore have to be clearly justified.”
!HOA-EB says that with only a few months left until December, which is a high expenditure season, such a move will leave people with insufficient money and lead them into debt.
“It is almost like having a COVID phenomenon that is gradually unfolding. With that in mind, I think economic decision-makers have reached a point where they need to recognise that there has been sufficient and stable recovery. Going into December, particularly with increased consumer spending, they should give consumers a little bit of breathing space. I think, currently, the requirements are reaching a choking point. We are already at a stage where things are almost at their maximum. Given that we are operating within an interest-rate and inflation-monitoring framework, with a monetary regime focused on keeping inflation stable, I believe we are already at a level where we cannot proceed further.”